Can someone explain the USD movement today?

New trader here, so be gentle…

Why is the EUR/USD moving exactly opposite to what would be expected from better than expected job data (NFP)?

Don’t try to explain it with logic!

Any economics commentator would have confirmed that today’s NFPs was a great sign of economic strength…

so when the USD tanked and it continued to slide hours after the release you had the perfect example of why currency markets are illogical or, at best, random.

Thanks for the replies!

I was wondering if it possibly had to do with the impending rate hike off of this positive news.

I think I’ll go back to technical trading… not having any luck with fundamentals. I have much better success with reading charts.

There is no logic to how price reacts to news, overall…

You would have to do a study of all NFPs and reaction

by USD over the years but I doubt that this would

help you with an edge in trading this event, because

your logic may be right but we do not move markets.

I made over 200 pips on my demo account today

with a short-USD position: I had no idea it was NFPs,

I stopped trading fundamentals last October and I am

never bothering with that again. Had I known that it

was NFPs today I would have probably stayed out of

the markets and pulled my order out, missing on

a great trade…

NFPs, rate hikes, The Taper, it is all untradeable

because it is impossible to predict the speculation

on the speculation over further

speculation: you would better train to be an

astrologist, frankly, than trying to make sense

of the market’s bizarre reactions, which can leave

economists, commentators, and traders

scratching their heads.

Finally, just a thought - I’ve touched on the FA on the Euro, most everyone knows about the FA on USD, also commented on the TA on both.

There is one more thing - have a look at the Eurx hr4 and turn it upside down - maybe a certain hair shampoo?

FA/TA both a reflection of the same market, eliminate either one and the mirror dulls.


:slight_smile:

Thanks for your posts, Peterma…

your making your life in forex way to complocated.

the last days actions were rumor actions and had nothing to do with TA.

A hike in fed interest rates -as its very prized in already since a while- forces the ECB to counteract.

The rumor -after the certainity of a FED hike- is that the ECB will aswell start rising the interest rates in order to prevent EUR/USD carry trades in favour for the usd.

such carry trades would drain investment capital out of the eurozone and carry it into the usd-zone.

the ecb will prevent that in order to keep the strenghthening economic growth in the eurozone alive.

the ECB would be the first bank in history doing a interest rate hike while it has a “asset purchasing programme” (also known as quantative easening) in same time running.

thats the reason for this “unexplainable fundament unlogocal actions”.

the only difference is that retail traders arent very strong on economic science fields and therefore very often missinterprete fundamental news/changes and what they mean in a economical or geopolitical aspect. thats why retail traders shouldnt try to interprete fundamentals and why they should stay out of news trading in which the retail trader has to act upon his own knowledge.

no macig witchcraft, no TA - simple fundamental logic and global economics paired with global financial politics.

Personally I think people really enjoy coming up with reasons for why certain moves were made [I]after the fact[/I].
Any unexplainable moves are written off as 'profit taking’
Technically all the moves made sense to me, however I was following the news narratives and ended up getting thrown around on these events. The conclusion I drew from this was that I should be aware of the news but focus on what I see and trade what I see, not what ‘should’ be happening. You may draw a different experience from this.

This week it’s the same story, more central bank decisions. It seems like a scary week to be trading though.

Pipster Pro it’s important to keep using money management so even when the news does the opposite of what you expect then you’re still in good shape. The idea is that if you keep making good trades and they pan out then you’ll end up recovering the losses where the news was irrational.
With this in mind you can handle the irrational news days regardless of the ‘reasons’ for the strange behavious