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Wednesday 1 July 2009

In terms of "predicting the past" I'd like to post a bit of comment on what did I predicted in relation with what happened exactly.
As UK Manufacturing PMI did not surprise me [merely higher than expected] I did not open the trade. Additionally as you can see on chart [firs yellow vertical line] price at the time of news was somewhere in a middle of mentioned in previous post channel what additionally discouraged me from any action.

What is definitely worth of attention is that my trading plan worked perfectly on US Pending Home sale [second line]. Of course now it's just looking back with no trading value, however I'm quite proud of it as this made me a bit more concerned that GBP is simply not worth anything more than 1.66. So just to feed my ego. There was GU over 1.6460 [1.6530], news was quite bad for investors, what drove GU down 50 pips within an hour.
As I'm writing it it's already Thursday after non-farm payroll, and I can see that GU plunged even further, but it would be far too much to point any relation between that and my predictions.

And here's the chart for you:

Today UK Manufacturing PMI would be perfect for short trade in case of worst than expected data. However asian session created quite plain decreasing channel [30min chart]. If at the moment of release price was at the bottom of it I would stay away.
Best scenario would be if before the news price will rise above 1.6460 there would be over 70 pips room for short move on bad news.

If data released was positivly suprising, I would trade long only if price was low enough [1.64 or lower].

Neutral data or some unusual price action before the news will definetly keep me off trading.

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