Rookie, check out Gold, then think of risk and the Yen.
Risk on and off thing with yen pairs can be frustrating sometimes.
Revisited the pair.
Now new high in 2 days. Stuck in a range. :35:
Oh well. It happens. Maybe I should have been patient. But the end of week is coming along. And I doubt if weāll see any significant moves.
Sorry I have been dragged away by a very challenging but fulfilling project.
Unfortunately FE because Iām having such a tough time since I switched brokers, I decided to go back to the basics and focus on EURUSD. Short Eight hours ago, up 100 pips+ so far.
Which commodities are you looking at?
That was just an overall question. Are you looking at the metal instruments or any other commodities from the COT report?
Yes, but nothing changed since the last conversation.
Good call Philip on Eur/Usd.
I took a small short, my first one in a while, have always been long. The Yellen speech has catalyst in my change, seems the Fed are doing what most traders do daily, they are weighing risk.
There is likely a consensus that the greater risk lies with any further stall in rates, the thinking may be that by further stalling then any hikes would be larger and create a greater āshockā, so December looks even more likely, especially with the GDP numbers just released.
Hi Peter,
can you please share your view on why it can be a āgreat shockā if interest rates are raised too late? We always hear only about why is it dangerous to raise it too early, but no analysis why it can be a problem if they come too late.
Thanks,
FE
Hi FE,
Is the Fedās view, I just happen to agree 
History has shown that when inflation is fought with raised interest rates it is often a reaction, usually too late, and causes a spiral of raised rates - net effect is not only to stifle inflation but also economic growth.
The Fed are saying that a gradual, by small increments, raise will minimise the risk of boom and bust.
Most businesses will agree, Iām betting that the s&p will respond positively.
BTW, lots of typos, silly tablet combined with shaky finger syndrome is my excuse.
Hey guys, letās talk.
About what will happen in the last 3 days of the month.
Okā¦maybe we canāt predict the outcomeā¦but we can look at the flow of things, and remember the squaring up of accounts that usually happen (months end play).
Well, Iāll give you what I got. Nothing but facts.
This chart is a gauge of strength to weakness. Points are totaled. I add up medium term AND short term trend points. Itās hard to explain, but just know itās a medium to short term perspective (weekly to daily).
And the max range is +28 to -28 .
Facts:
āJPY is the strongest. They have pretty much kept it up all month. Weāre all waiting for it to drop, but no. Thatās the trend. Calling it safe haven still intact?
āGBP most notable to me. They have taken a really big hit last week. They have broken multiple trends.
So, the question begs, is this a new trend? Or is it the boost they need to climb higher?
āCAD got a huge boost this past week. So, we should ask the same questions to them. Although in my mind I kind of think this is the boost up before the great fall these last days.
This chart is the movement on a daily basis. Itās the ranked daily % for that day only.
Most notable to me is the NZD this past week. Is this the climb before the fall also? I mean, looking at the Major/Comm struggle you will always see within a week how one of them will climb on top for a day.
And this last chart is the total cumulative %'s added up as the days progress.
Itās just another look at how it all unfolded.
Any thoughts guys?
Mike
Well I didnāt trade GBP at all this week, Eur/Gbp daily is trying to make itās mind up whether to bounce or break, so until that clears Iāll leave Gbp/Usd aside.
Eur/Usd is more rational, I switched to being a bull today in expectation of the poorer pmi, flat now.
Tomorrow, maybe poorer NFP, might trade early UK time, Iāll see what the Asian brings - I donāt intend to give anything back so if I can get a b/e position going then great, if not then out.
Hi Mike,
nice summary. As we already stated before, it is always getting better and better. Actually did you open trades based on it this week? If yes, how are they running? What are your accumulated stats since you started your strategy?
Everyone,
what is your strategy befor NFP? Any adjustments or trading strategies? I have been looking lately on the high yielding exotic currencies. I am just looking and looking and looking week after week. Check out the long term MXN, RUB, ZAR etc charts. I just cannot wait until the USD rally is over and those trends will turn to the downside. Going short those USD pairs with the good carry trade sound awesome.
Have a great trading day everyone,
FE
Poorer was an understatement !
See how Eur/Gbp is reacting to NFP, then compare Gbp/Usd to Eur/Usd - see how Eur/Gbp is āholding backā cableās rise
Hi Peter,
wow! What a slep in the face for USD bulls! I do not even remember such an NFP. I see one neutral data (5.1% unemployment rate) and everything else is red on my economic calendar - ok, shouldnĀ“t over dramatize, the Average Hourly Earnings got a +0.1% revision for the last report.
This reminds me when Philip discussed about one year ago (with many analysts) if the first rate hike might come in Q1 2015. Well, 2015 might be the year where a rate hike was expected and postponed throughout the whole year.
Peter, I congratulate on that call. I have many wishes where I havenĀ“t travelled yet on the world and for sure with this trade you made, you can pay my holidays.
One sidenot. I also analysed (like Peter above) the reactions of the pairs almost 2 hours after the report. Some interesting information: AUD has to be very weak as at the time it is the only pair which is losing to USD compared to its pre-NFP level.
Very interesting to observe exotic currencies around the world. They show a completely different picture. HUF is beating USD by a lot, TRY also, RUB is at even, but ZAR and MXN even lost ground vs. USD. What kind of a reaction is that? I guess there are huge forces, maybe a weak USD on one side, but also a safe haven USD on the other side for some currencies.
Will be interesting what the Fed says next time. Maybe it will be like always: the bottle is half full, but also half empty
Take care,
FE
Hi FE,
Lol, I was bullish Euro yesterday and today, difference yesterday was that I was happy to enter before the news, today I am happy with my 1%, entered only after the release. I again chose Eur instead of Gbp because of Eur/Gbp.
Flat now, would not chase , anyone who has done so will already be beginning to panic.
Next week a whole new week to get involved.
Hey Peterā¦
Man, everytime I hear you talk, I am reminded more and more that I really, really, need to start working on the comparisons (between the pairs). You have been like this the entire year. I remember you said at the beginning of the year that you will be concentrating on the intermarket relationships. And lately you have been looking at the currency pairs relationships.
Well, this morning (as Iāve been tallying things up) I wrote something real big down to keep it fresh in my mind to embark on thisā¦āCORRELATIONSā also with it I did writeā¦ācoupled with time frame progressionsā.
That will definitely be my next big project. And I think this will help to me choose which trending pairs to get intoā¦as opposed to all of them.
If you have any tips, I would appreciate it. Like whatās the most looked at (EUR/GBP?)
Ok, like whatās your train. Example you look at the EUR/GBP to determine whoās stronger there. Then compare that particular one to both the EUR/USD and GBP/USD. ?
Well, surely I can come up with a way to tie them all together. Then just always follow an outline to find where they sit against one another.
Thanks.
Mike
Mike,
Eur/Gbp is big time important, many times you will see, for example, the guys on forexlive, mention that cable is being āhamperedā by Eur/Gbp etc.
I remember posting way back maybe 3 years ago that each time I enter either Eur/usd or Gbp/Usd I look in the wing mirror, that being Eur/Gbp. The importance of that cross has increased dramatically since even then.
Consider this, the amount of money (fancy term is capital flows) that cross the English channel, it is measured in billions, then consider who it is facilitates that exchange of currency, and then further consider that those facilitators are in the business of profit.
So if it happens that Eur/Gbp is thinking of breaking to the upside, those same facilitators (banks) will wish to profit by ensuring that Gbp is valued accordingly.
Shared this older story with a friend the other day, consider that the numbers are net, also take into account the source may be EU negative, nonetheless it offers a picture of the scale of FX exchange on Eur/Gbp
Britainās net payments to EU soar by a third in a year, ONS figures show - Telegraph
Mostly I trade Eur/usd and Gbp/Usd, no idea why, itās just what Iām used to. Sometimes Usd/Jpy for scalping, but only as an add on to one of the others.
I only trade short term fx, so if a move is in play, first thing I need to know is which currency. Eur/Gbp will tell that, as will Usd/Jpy - so on Friday Eur/Gbp was ramping up, so not wise to short USD using Gbpā¦
But here is where the wing mirror comes in, I had traded up after NFP, and exited after a gain of perhaps 1.5%, done some scalping Usd/Jpy to get the numbers up, so in comes Mr Greed.
Eur/Usd looked as if it had the moon in itās sights, it had cleared 1300 and h1 urged even more, why not get back in?
So I did just that (as you do when the greed devil whispers), this last entry was arounf 1310.
But watching Eur/Gbp I could see a different story, price had reached up, likely for a few stops, reason was immaterial, but it showed all the signs of reversal, so I exited the last long around minus 20 pips.
It was for that reason I posted about not chasing, Eur/Gbp was telling the story of the reversal.