I don't expect German ZEW to move the market. What can possibly happen here is that this data would trigger a bigger move [but obviously no price action will be caused by data, it's rather traders waiting for data to do whatever they wanted to anyway]. Additionally I do believe that big move can happen only in trend direction, so worse than expected data will keep me away from market. If data was better than expected I will wait for some small retracement on 1M chart [even if initial move will be down].

If EU price break below current 30M range low 1.4950 I would cancel all actions planed.

All FX services I use [dailyFX, forexpeacearmy, blackswantrading, fxbootcamp] yeld USD turnaround.
I can't agree or disagree with any of their statements, what I'm focused on is when to say "stop, we're wrong".
Another USD plunge today didn't prove anything, just brought a bit of confusion.

I will be definitely focused on Aussie interest rate tonight, before just in half an hour there is UK Services PMI released.
For this news I'm in general biased short, so worse than expected data would be much more promising for me.
Best point for entering short would be 1.5975 - it's 50% fib level for last hour plunge [between 8:00 and 9:30 GMT+1], this might be important resistance in case of better than expected data.

Whatever initial spike will be, it's very likely that it will turn back to 50% between top or bottom of spike and pre-release price, and that's the level where I'm keen to enter [either short if initial spike was down or long if it was both up AND data was better than expected].

It may happen especially if data was better, that spike will go up, but price will back to pre-release and go lower [pre-release will be my SL] in this case I would re-enter on 50% fib between highest price of the spike and lowest after break below pre-release price.

Today news was not exactly what I expected. There was spike on GU and EU against data released, however it took quite a long time in terms of news trading to retreace to pre-release levels.
There was anyway nice trade on UJ, it was 50% retrace between news spike and pre-news level [around 89.16] from there price went around 50 pips down.

My general bias was for long UJ and short GU and EU, but news was rather against that, but that was the reason why I did not expected much of a plunge on UJ.

A big surprise was massive 120 pips rally in UJ 1,5h after the news, what I can't explain however treat it as a confirmation of trend reversal on this pair. [and possibly confirmation of short term decrease on EU]

For today Non-Farm Payroll I have mixed feelings about UJ, It's on definite trend down, however It's on bottom of a channel, near January low and there was very clear pin-bar on Monday that may indicate some trend reversal.
Very important is a fact that today data may establish significant high or low for nearest future, so if I opened correct position on it, I would let half of it run for bigger profit [92.53 up or 87.12 down]. If there was strong rally in first five minutes or so I will try to enter on 50% retracement [calculated from pre-release price].

EU seems to be nice plunger on this release, best strategy would be to trade breakout below prerelease price if initial spike was up, very big plunge potential is in this pair if it worked out.

For GU I have no specifisc strategy, it is possible it will go along euro, however GU plunged strongly already, so there is much less potential in it than in euro so if anything I would just copy my EU trade.

As usual - nice recovery thumping data brought some random price action, this time EJ and UJ price shadowed its morning slump.

In terms of predictions I would see quite a bit of room for EJ to go much higher recent high @ 134.40 is crucial for this pair to unveil.

As for GU and EU I hold general belief that they will move more or less together, but what make it really interesting is absolutely different situation.

As for EU I see one of two scenarios possible:
- traders totally convicted that Euro is best place to hold the money [recession is gone] so this pair will rally as long as it won't hit it's levels from July last year [1.60] slightly retracing on the way.
or
- Euro runs out of steam and sooner or later it will retrace at least to 1.44 or maybe even lower, and 1.4720 resistance is a perfect level to start such move back.

GU also stands in a middle of action, and whatever it would decide to do there is reason for that.

-Due to a hints from BoE about rate cut GU fell a bit, however today was definitely consolidation day.
What BoE said was exactly information that in spite of biggest efforts, there are not enough money in the market as retail bankers are not that keen to lend it to a public. It's a big issue - if big dogs don't feel like lending, why we should believe in recession happy end.

In other hand it's obvious there was no a single trader to buy a penny on BoE announcement, GU collapsed, but every move [especially big sudden moves] is shadowed back by opposite price action. So this is another thing that may happen to GU. It may retrace all yesterdays loses and go back to it's track way above 1,70.

My general conclusion is that GU is better to go long in case of EU and GU rallies [as GU already retrace a bit what possibly is ahead of EU]. EU is better for short in case of credit crunch part two as it has much much more to loose.

Personally I expect bullish option to unfold.

JPY weakened a bit, GBP slumped on hints from BoE that interest rate should be reduced, however it looks that there was no significant news that would change anything. EU rises too fast, however I would hesitate with buying as retracement may show up. GU fell but it's far from bottom of channel @ 1.6050.
Weakening of JPY gave some rises even on UJ, but there is nothing certain here either.
I have no clue what to do in terms of trading. There is possible regain on GU as there is no big deal in terms of international currency trading about this interest hints. Just traders earning their money.

In general I think it's better to believe in recovery, but the only reason for that is the brighter future if this plan will work. If I was wrong on that - everything would plunge. Maybe it's just a kindness of those who believe in second slump of economy that they dont sell like crazy, just stay aside, but whatever reason it causes economy to be alive at least.

As for EU news, not only GU broken lower before news but also post release price astion on M1 chart was far from what I expected therefore I prevented myself from trading today. Later during a day Morning EU low turned out to be today low, but staing aside is also a position.

For today I'm comfortable with taking long on either EU or GU after European Industrial Production release. What I'm looking for exactly is if price will not break lower [current low is EU@1.4515 and GU@1.6550] around news and what's more 1M chart after news will show some higher lows higher highs. I would treat it then as good SL level and would bet for 100 pips gain within coup[le of hours no matter what news will be.
Otherwise, ifprice will continue falling I would stay away for today.

On a morning UK news I have managed to gain some pips, which I managed to waste on attempts to reenter market. Pound did not break it's highs @ 1,6741 and ranged for the rest of the day.

Situation was quite different on USDJPY past Prelim UoM Consumer Sentiment. I was not sure what will be exact direction after release, I was expecting either risk appetite driven depreciation of the pair or significant up [both if news were better than expected]. Finally I decided to trade daily options betting on both directions, and that was just perfect [I assume that it was luck based gains as driven by JPY appreciation what I did not predicted].

To sum things up, DOW didn't managed to break last week high, gold finished week above a 1000 with new high @ 1011 JPY skyrockets, dollar's flat. However it's not even correction, It's just a flat friday. If monday will bring new highs on dollar crosses I will think of buying like crazy.

China expanded its export, USD decreaset overnight, GU broke 1,67.
For PPI i see strong buing oportunity as long as GU will manage to retrace below 1,67. 1,6686 is nice las day high to bounce from. Otherwise if GU left on its current level I would buy breakout of today high at 1,6733 with some tight stop loss.
If GU rised all morning, I would rather stay away. [this pair in my opinion badly needs some pullback].

Everything seems to be right. Treade balance felt more than expected, dow goes up, USD goes down, and what's more gold went a bit down. Did not break recent highs [what S&P did and DOW is quite close to it].
Tommorow GU deserved some proper retracement after todays gains hopefully before PPI input what would give nice signal to buy more and what's more important that would give nice stop area for trading.
For tommorow i hope to see some more movement for my USDJPY pair as I partially hedget my put option by spot order [so it's just my wish, nothing tradable ;)].

That's all for today :)

There is nothing new I can write.
USD falls, Dow rises, GU still below 1,67, EU breaks up a bit, gold touched 1000.
Recession have ended or not, no one knows, however everyone behave as it's done. In my opinion too many people is interested in gold, and it should be priced around 997. However gold skyrocketing indicate inflation fear. I think unemployment is very important indication of is recession over.
In fact there is not much to do in terms of trading, maybe daily options trading during GB interest rate decision and BoE statement. Nothing is for sure, I wouldn't even recomend buing gold, as recession is not that certain, if only US start to buy chinese things, there will be no more need for gold, and we will see 960 or so. [as I'm writing it gold is priced 985].

What I can say for sure is that there is a lot of werid price action that doesn't hold the water and sooner or later something must change. Unemployment must fall, inflation must skyrocket or stock must fall [recession part two version].

For trading tips I have one: go take vacation ;)

There was nice piece in "Rminiscences of a Stock Operator" by Edvin LeFevre. About breaking out of range:

"I recall how I missed a big play just by trying to anticipate the starting
signal. I felt so sure of conditions that I thought it was not necessary to wait for the line
of least resistance to define itself. I even thought I might help it arrive, because it looked
as if it merely needed a little assistance.
I was very bullish on cotton. It was hanging around twelve cents, running up and down
within a moderate range. It was in one of those in-between places and I could see it. I
knew I really ought to wait. But I got to thinking that if I gave it a little push it would go
beyond the upper resistance point.
I bought fifty thousand bales. Sure enough, it moved up. And sure enough, as soon as I
stopped buying it stopped going up. Then it began to settle back to where it was when I
began buying it. I got out and it stopped going down. I thought I was now much nearer
the starting signal, and presently I thought I'd start it myself again. I did. The same thing
happened. I bid it up, only to see it go down when I stopped. I did this four or five times
until I finally quit in disgust."


So here's my GU story :)
In addition to no one want to break up 1.67, i suppose that in spite of rising risk appetite there is still no enough volatility in emerging market, therefore even if investors wish to go back there, they have no one to buy from, so they still have to keep their USD, and that's why it doesn't fall yet.

At the time of yesterdays UK MPC Meeting Minutes GU was below mentioned by me level, what prevent me from any trade. From that news however price started climbing, and today skyrocketing Dow Jones may trigger weakening of USD. Therefore I wouldn't be suprised if GU will head to new high on 1,80. I wouldn't bet on that now, however I will follow closely price action near 1.6660 and 1.6743. Especially if the second one will be breaken firmly on tommorow news, I would see new high around 1,80 within one or two months. In other hand tommorow news may return price to 1,60 if it will struggle with mentioned levels.

The point is that under current market circumstances thtere is possible strong breakout either up or down, and it's most likely to happen during news release. However in other hand there is much more likely that neither approaching UK MPC Meeting Minutes nor any other tommorow or day after tommorow data will trigger such break out. Personally I do expect breakout to occure and I do expect not to get into bigest move of all. However awarnes of inevitability of such move I am alredy prepared to know what will happen just after. And that's the point of trading.

So nearest data releases should rather bring another bounc trade oportunities and eventually one that establish new direction for USD pairs. It's important to keep significant levels in mind to not get sweaped by such move.

MPC Meeting Minutes for the first time from two months will be published with no any other significant data released at the same time. There should be no big surprise on it. That is possible that black swan hunters will buy some pounds before the news, what may cause spike just after release [no matter what exact data will be]. My idea is to trade highly doyable trendline based on lower lows on recent 30M chart. It would be the best to keep some tiny Take Profit @ 1.6385 to cover possible losses. If price will manage to break lower, there is nice another 100 pips to cash in. However if suprise have happen, bounce down is still highly probable, but it's hard to say how high.

If price will break 1.6380 before the news and won't bounce back, I would stay away of the market during release.

On Bernake Testimony I will comment later today.

Friday news was not much better than expected, so I decided to trade my 94.0 idea and have lost around 20 pips.

My general thought on that is all in all it's better to get lost with a map in your hand. My map says there is stagnation time for USD and it won't break 1.67 level on GU until DOW will advance 1500 more, what should not happen soon. In other hand there is some room for USD to gain a bit, however now the best idea is to trade bounces. Even on this trade here I done pretty well as I have saved about 20 pips by not entering on a market level just when Building Permits was released. [I must confess here that I have opened half position just before news to not miss a spike down if one happen, but I managed to close it soon after release to with about 0.1 pip loss].

So the map is the very first thing you need. Even if your map mislead you, you can still use it to get out of trouble by following way back.

UJ @ 94.0 looks nice to sell on spike up if US Building permits will be worse or as expected

I have just published chart for last comment.
Click here

Just after I wrote about one green day before end of a week, Thursday showed nearly 300 pips gains on GU. To be honest I didn't expect that much but in other hand I did not expect this pair to rise higher than 1.64, therefore I see depreciation for the pair for today.

Both UK PPI and US Trade Balance might be good triggers for shorting GU, especially if pair will be at the top of channel at the news time. My trading direction however will be short only if pair won't start to penetrate 1.64 area again, or break it. If that will happen, both direction are possible.

Additionally I would not expect GU to unfold another 300 pips jump, therefore if pair will run that far I will suspend all my predictions till sunday.

As there was no big surprise on Halifax HPI I did not trade it. GU as expected didn't even touched 1.6160, what fits my bearish sentiment on this pair. However this week I expect at least one green day on this pair, it's hard to say would that be tommorow or Friday.

To make thing easier to follow I decided to revitalise fx-tool concept, where you can see charts for different news releases. I will upload more charts soon, however you can now see one for Halifax here

Halifax HPI is about to be released.
As GBPUSD shows not much power of going too far either up or down I would be interested in long position on good UK news, however I would not expect much more than 1.6160.
In case of bad news I would trade short only when price would go below today low, however it would have to be clear that it's not just a stop loss hunting. To be safe I would wait price to bounce back to 1min bollinger band and then entry short.

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.

First of all Consumer Confidence was lower than expected, secondly at a release time it was 200 pips below today top. As none of my condition was filled I did not trade it at all, however it's worth of attention that bad US news caused another 100 pips decrease with not much sign of bounce back yet. Therefore I have no any prefered direction of trading for tommorow. I expect manufacturing PMI to triger change of local trend, and non-farm payroll to dictate trend for nearest week or two.

As an ilustration, there's a picture of today GU 30 min chart.

I see a lot of fuuz around 1.6660 level [ by myself placed SL at that level]. Today US Consumer Confidence is in my opinion crucial for nearest future of GU. Personally I will trade it long especially if data were neutral or better than expected. If before the news price will be not more than 80 pips from current top @1.6743 I expect it to go even further. If it's too far from it we will probabily see either no action up or 50-80 pips up within firs 1,5-2 hours just to rebound to prerelease price.

If price will break current top before the news I would be very cautious as both direction would be possible regardless of level of confidence.

There are neither important events nor specific direction I could spot, so I'm staing away of the market today. Tommorow UK Hose Price Index might be tradable as well as US Consumer Confidence. Market moves sideways so far, so I will be betting on bounce down on top of upper ines on GU or EU.

That's all for today

Tuesday fundamentals did not affected the market however marked moved around 200 pips up on GU and EU. As it seems to be ranging time there is time for contraction today or tommorow.

Home Sales data will be strong mover today.

Best scenario would be trade short on reversal after about half an hour of rising on EU and GU after release.

I give up all my opinions. Lack of direction lasted long enough, so both directions make sens. For now it seems that investors make some adventage of interest rate diferential so maybe the longer GU and EU will last on their levels the better for them. I'm reading Alchemy of finance by G. Soros, and geting more and more convinience that every move on the market will bounce back sooner or later. Will see and post. For tomorrow there is one my favourite data release: Existing Home Sales. If nothing significant will happen this may be nice trigger for move back up to 1.65 on GU or 1.3950 on EU. But I only good or neutral release will be good for taking long, and only if price will remain unchanged during the European session.

I'm still bearish in my mind. Two recent news action brought massive decreases on GU, however yesterday GU regained almost all of its loses. Today retail sales move GU down again, however this time it broke latest resistance 1.62, and yet it did not even gave a sign of retracement, so maybe it's a sign of moving further down. There is still US Unemployment Claims on its way, that might be nice trigger to break firmly 1.62 support, however the clearest for me price action that may happen is first to retrace to 50% fib of that massive move 1.6328, and then break 1.62 and run as low as possible. However this idea might be biased by my option position that is still not in money And I hope to hope in before friday afternoon ;).

In other hand I would be very very confused if 1.65 level was broken today as it could mean just anything. Yet I'm still bearish with expectation of bounce up to 1.63 before further loses

This week I'm waiting for either breaking up above recent high 1.6662 or below recent low 1.5800.

If it will happen during important news I would expect even price to not retrace around that level. If it will be broken during regular activity I will wait for retracement, and then enter with some small SL aiming for huge profit [300 - 500 pips]

Background idea when I've opened this blog was to spot only setups when I'm 100% sure. I need to keep remind it myself as when like today I don't open any trade I start to feel that maybe something is wrong with my ability.

So once again. FOREX is safe bussines as long as is treatened with caution. If I'm not sure, no position is the best position. That's all.

I also write it as I feel a bit uncomfortable that most of my gains from last week I lost this week [I still have one put option opened, it's valid till next pfiday, and if miracle won't happen I will be back where I was last week. Not bad at all, as I can take it as a kind of free lesson.

See you Monday.

I lost any idea of what may happen next. GU - my preferred pair for now goes up and away, however I would not trade it long with too much confidence. In other hand if it will cross 1.6660 [recent high on a daily] there would be even stronger evidence of rising power. There still is some limit around 2.0, it's where it was last year july, but it sopunds quite werid.

For now I'm staing away.

It's a hard time when you figure out that there is no gains with no risk.

It may get you when last position was looser and you think if it's a good idea to open again

It may get you, when last time was looser, and now your position is on a regain-last-loss level, but you still see the room for it to go further, however don't see any room to lower your current SL what keeps you aware that it still may be another loss.

My way of overcoming it is to be aware of nothing. I'm just look at price action as it was meaningless for me. As only involved thing was my trading plan, not money [trading plan not only for this given position, but general trading plan for this expected downtrend what means that if not this trade, maybe next one will succed.

I'm shortening EU and GU again as I said yesterday but there is no any special signal. I keep my SL at top of today [GU:1.6176 EU:1.3965]and TP around the bottom of yesterday [GU:1.5800 EU:1.3805].

PS you can subscribe me on Twitter: http://twitter.com/Krysztau

I was quiet recently as in spite of strong short tension on GU and EU pairs I did not saw anything I could say certainly enough.

I have took some pips on Friday US news, and lost some today trying to jump in short position without any special event coming.

There is first bunch of news coming Wednesday, however I hope to pips a bit tomorrow by entering short on some promising pullback. Keep in mind that I have no any special trading plan in my mind, just waiting and watching.

As I'm writing this note I came to mind that maybe I should stay away of the market for tomorrow..?

It's more and more obvious that something much bigger is on the line. GU goes plainly up as it was not planning to turn back anytime soon, UE retrace from time to time but nothing big downward, as if skyrocketing prices did not generate any sell pressure among traders.

Under such circumstances I'm going to make some huge step back to draw fibs from last year july high and follow monthly pivots. Will post some of my charts with lines soon.
Yet I won't comment on current charts and wait for tommorow news. To make it easier to watch I've started to post screens of 30M charts from previous data release. You can see it here:
http://fx-tool.blogspot.com
I'm just starting, but I have aredy posted charts for Pending Home Sales what you may find helpfull for tommorow trading

UJ appreciated over 100 pips last night after I posted my long sentiment on this pair. EU raised around 60 pips at the same time, however now it retraces and I'm demo-shorting it from 1.3874.

For US news I see opportunity to short EU even further, however I'm not sure what impact exactly may be. But there is much more room below it's current price than above.
UJ have some chance for small retracement, but general trend is still up.

It seems there is some local reversals approaching for next couple of days which should drive EURUSD down and USDJPY up. There might be some stagnation visible on GBPUSD pair with small sentiment down, so I'll leave this pair for a while.

This general idea of retracements came to me from observation of 30 min chart. Firstly move on GU and EU was not as firm as it used to be last week [more up-down action during a day] that show some confusion in decision making what should happen now. Another thing is decline of EU as a reaction to the today neutral US Existing Home Sales [only 0.03M deviation].

Al I ca say now is that my attention moved from GU to EU and UJ.

Today European session showed nice plunge on both GU and EU pairs. As Euro seems for me to be more vulnerable to risk aversion I would expect it to firstly retrace and secondly fall maybe even further. Good retracing trigger is US CB Consumer Confidence, so if there will be no retracement before that I would hope for good news and sell after move up. The problem is how far up can it move, or how long would it move up on good US news. I see nice resistance @ 1.3944 [it's last swing down before plunge] However I expect to be stopped out maybe two times before real move down will begin. Dependably on difference between expected and released data and initial price action I would expect to place first order around 5-15 min after news, if it didn't work, next half an hour up to one hour may be next good moment, and the third one will be after 2-3 hours.

As there is not too much action after news, and price bounced back above my entry level I have already closed half position with 9 pips loss and set another half to close with 9 pips profit.

EURUSD order is filled. I hav set SL @ 1.3990 and TP @ 1.3925.
there is bank holiday in US and UK so I'll have a look in half an hour.

Calm weekend opening makes me suppose that price is quite comfortable on it's current level. According to last week price action I have set sell stop for German Ifo Business Climate release at bottom line of channel formed from the beginning of Monday @ 1.3975. However if price will hit upper line of a channel I will cancel my order.

There is nice free signal service on Forex Peace Army [all you need to do is to register for free]. I will consider trading their triggers today

As there was no any extraordinary price action I have closed my GU position with 97 pips gain. The only reason for that is closing position before market close on Friday 

In terms of Risk/Reward ratio I wouldn't say that it was 1:1. Please keep in mind, that my 100 pips SL was placed in case some accident happened.It's not exactly same thing when you place some SL because method demand it o be paced exactly here or there. R/R factor makes sense when you use automated trading rules. In my recent trades My SL and TP were rather floating and depending on my impression about the market. Therefore if anyone wants to think what is m RR ratio, one should follow all my trades and figure average loss and average profit taken from all trades [there is not enough of them so far to count some reliable averages, but sooner or later there will be more]. I am protecting my position from unexpected loses by placing SL, but those are rarely triggered as I exit position much earlier [usually when I change my opinion about market sentiment]. So here's piece of my thought about trading philosophy.

Strategy for now:
If price will reach 1.5755 [last wing low] I will try to close it with no gains.
If it bounce before reaching that resistance, I will move SL to 1.5755 ad then to next swing ow after price will return above new high @ 1.5950

My GBPUSD long order was filled in during early European session. I was very good in predicting a bit bigger move down so my 100 pips SL was not triggered.

Now when price will break 1.59 I will start to manage this trade by moving SL somewhere higher.
There is possible scenario from two days ago, that price will go strongly up and then shadow most of that move, so I will possibly be out around 6pm GMT.

GBPUSD Is still running up. For tonight I'm leaving buy limit @ 1.5820 with 100 pips SL and sell stop @ 1.5510.

The most unexpected what can happen to me is price ranging after retracement to 1.55

Have I just said "fake move" yesterday?
Here it goes total reversion to 1.5515 and then bounce to 1.5600 [exactly as I said 50-70 pips from 1.5545]!

Now it's good moment for final decision. If price will go back to touch the top of last rally I would expect it to rise even further [after a little consolidation around 1.58]. If price won't touch that level I would set sell stop at 1.5510, as this might bring some nice 100 points profit in first run, and might be first sign of trend change.

That's EXACTLY what I meant just about 5 hours ago! :)
As I have no explanation for this move I've closed all my demo position now. Price have some chance to appreciate more, but in other hand there is plenty of room to shadow this at least partially fake move [this also refer to what I said yesterday about timing].
There is interesting point @ 1.5545 - it's a last swing high before this sweet run up. I have set buy limit there on my demo account as price may bounce for about 50-70 pips from there [it's not a trading advice, whatever you do, you are responsible for it :)]

Finally it's time to change my judges. I shouldn't marry with my opinion about GBPUSD which I was watching closely recently.

I was waiting for price to retrace, as the pair was moving high for too long and too fast to keep up with such a dynamics.

There is still possibility of move back, however this pair must have some nice potential to move even further up. Maybe not on a news, but in general. I think that because of total reduction on last news spike I was writing yesterday.

For today I see great breakout setup on GU and already bought some, however there is a chance for it to be broken downward. There i just more room above 1.55 than below 1.54

And here's the chart:

Today Building Permits  and Housing Starts Was a great oportunity to short EURUSD and GBPUSD what I did. Another thought I came across today is that there is another factor of succesful trading. Even if I can predict market moves in front of their occurances trigered by news events I still need to estimate how far or how long will move last. I think that more important factor is how long.

My major strategy says that there's not many news that can hnoestly move the market. Most of moves are fak and are about to be shadowed by correcting ove to prerelease level.

My first impression about chart is that this week might be more active under bad news than under good. EURJPY n my opiion will eperience the strongest pressure, net in line to decrease will be EURUSD followed by GBPUSD. USDJPY remains big question for me. I think It would rise the most of all four followed pairs under calm market condition.

Today Price action on German Prelim GDP q/q made me think, was that huge move predictable. No matter what direction, I just wonder was that possible to predict a size of move.

My general idea so far is that if there's no reason for price to change, it must bounce back. Price of EU was pumped up by risk appetite, so it must take some opposite movement to close all those positions. In other hand there was already couple of days since EU rocketed up, so there is a chance that part of profits is already taken and some sell pressure released slowly enough to keep price in place.

Recently however I started to consider, whether it is possible to predict big move on a news even if it's not exactly clear what is current market sentiment. 

Today Core CPI is tradable. 
I would be more happy to short EURUSD especially if it retrace to at least 1.3590. If it will not, I would predict short with possible bounce back up to that level [maybe even a bit lower - to monthly pivot level @ 1.3577].

Whatever happened yesterday I find my yesterday preview highly tradable. Today I will watch closely GBPUSD pair. It's very tempting to short it on today's US news, but it's not as straight away trade as one from yesterday. If there was retracement to 1.52 before US PPI I will certainly short this pair, but I will protect my shorts with proper Stop Loss. In other hand I wait for GU to cross yesterdays low @ 1.5080 to see the plunge I'm waiting for since couple of days.

Three steps back

Today a bit of personal reflection.
As a result of my prediction proved right [I spoted nice oportunity for short trade on UK Inflation Report in previous post] I refused to use my brain anymore which is quite shameful. After nice trade I have opened another position during Retail Sales news. I have stated today morning that there's no point in trading UJ which I did, and after that I placed EURJPY order and wider my Stop Loss.

What happen next is exactly what should happen to someone who as a result of overestimation ignores his own judgemets on what one should ad what one should not to do.
I'm ashamed ad gracefull that I finished my day a bit above zero [but loses huts a lot ;)]

Today I see nice oportuty to short GBPUSD during Inflation Report as it aproaches quite significant resistant @ 1.5373.
At the same time EURUSD s approachig its resistat point @ 1.3738 and USDJPY is nearly on the bottom of daily channel - 95.62.

I wouldn't trade UJ up, but all other pairs are very promising.

My recent GBPUSD prediction absolutely missed reality. GU decreasd on interest rate, but on friday recoveret strongly. Daily chart however does not look hat bad. You ca easily notice that mentioned pair was moving within some reasonable range, what keeps my expectation of 400 pips retrcement still valid. Whn writing this post strenghtening JPY caused 100 pips fall on EU ad UJ what is not really surising simply because I did not expected anything for those pairs.

For now I can't see anything from charts what will keeps me away from trading. In general I wouldnt expect big suprises on daily chart, so rapid moves should be mostly shadowed by moves back.

PS.
I have just created new wbsite: fx-lines.blgspot.com which provide some key S/R levels, fibs worth of attention and weekly and monthly pivot points. If you'd like to campare it with your thoughts jus visit http://fx-lines.blogspot.com.

Apart of market reality I think that recent price action is driven by psychology. My new idea is that there is a bunch of traders that just become less aware of reality because of reality did not gave any sign of its existance. Financial crisis did not change at all. What have happend was couple of consecutive US better than expected data. Those releases did not convince anyone that market does better and better. Those data might have reduced level of traders attention.
As a result I would look for GBPUSD long after UK interest rate release at 0.5% [preferrably after some spike down]. But for longer timeframe I see nice setup for dramatic plunge of this pair [400 points within two days, preferably triggered by some bad news].

Price action on ADP Non-Farm Employment Change [came out much better than expected] gave me some clear view on what's going on.
Firstly there was quite a big spike up that broke 1.3340 on EU as I said. EU, EJ and UJ pairs apricieated strongly, however retracement on Euro pairs was same quick as quick was jump up [around one hour]. USDJPY did not retreace this way, but UJ plunged during asian session, so news spike can be understeanded as a return to yesterday price.

Overall price action brought me to thought that there's not too much pressure in currencies pot. Price is quite free to go either up or down [hower I would be much happier to open long positions on good news or pullbacks]. So for today I don't see reason for sharp moves, what's more I'm expecting Thursday and Friday to be rather quiet days.

For today ADP Non-Farm Employment Change I would trade EURUSD. Both directions are quite similary possible, however if I traded short trade I would close quite quickly.
If news won't deviate far from expectations I would trade long [with expectation of crossing 1.3340], if its much higher than expected, I would short EURUSD [with possible bounce from 1.3220].

After today I see some possibility of change for my tradeplan, however it's still too early to judge anything.

FRIDAY COMMENTARY:
As I predicted US ISM Manufacturing PMI was good trigger to release pressure accumulated by risk appetite for last few days. In spite of a bit better number EU GU ad UJ fell in first 30 minutes [what confirmed my theory] and rest of a day didn't brought new highs for any pair

WHAT NEXT?:
Now I expect to hear analysts talking about EU returning to its channel and about double top on GU. I wouldn't be surprised if both those pairs decreased on Monday or Tuesday, but I would wait with judgement if it's downtrend or did they just retrace.

My idea for now is to wait for nice short setups for those pairs. 1.3175 area for EU [50% fib] seems to be good to place Take Profit order. I'm not sure about GU. In spite of nice uptrend it was quite choppy, so maybe jump in and out would be better tactic, but it's not for me.

MONDAY NEWS:
For Monday there is Pending Home Sales released and again I would be much more happy to trade worse than expected news[EU and UJ], especially if price wouldn't decrease too much during European session.

TODAY CHART:
(Time of US news release is market with yellow vertical line)

1.05.2009

Yesterday's US news come within acceptable range, however just after release GU and EU pairs drop strongly. For me it seem as some pressure release happened, what keeps me in uncertainty about nearest market direction.

For today US news I would be happy to trade EU short if news will be worse than expected for USD [as good news increased EU value, opposite should happen with bad news].
I think there is still a bit of short pressure in EURUSD, however it may be not enough to press EU down on good US news.

Perfect trade would be bounce down on bad US news if price appreciated till 2:30 pm. I would expect about 50 pips.

If news are better than expected, it would be good for 30 pips up, but more I would find risky.

GDP came wors than expected, what holded me away from trading. release brought decrease of price on EU GU and EJ pairs, but soon they just turn out to be little corrective moves.

stability of USDJPY just ensured me in my opinion about best stratgy for FOMC release, that was bet o volatility by buing options both directions.

Now on daily charts you can easily spot breakouts of top channel trendlines. They may be sigals of trend change on my favourite pairs, but to say so I need to wait for retracement first.

For now I have no plain strategy what to do next, but certainly sooner or later I will point out what hints am I looking for in price action or market data to predict next market movement.

Now it's good to stay away as both directions of move are equally possible.

 

As I mentioned yesterday I find it quite hard to predict, whether EURUSD will keep it's channel, or does it establish a new uptrend.

In spite of uncertainty there is some opportunity in front, which comes with FOMC statement with interest rate. Whatever will happen There must be some high volatility action either up or down.

My strategy for today will be definitely bet on that volatility, however as I'm not sure about direction, it's gonna be some option trading [I will buy some cheap put and call option short before release just to sell both when price will show 50 points spike, hopefully to obtain 1:2 Risk-Reward ratio. However If at the time of my transaction price will be testing top channel line [coincident with pivot S2 point] I see a big chance that keep with my option till the end of a day may be even more profitable.


There is also quarterly GDP release that may bring some nice price action. Personally I would be more interested in long position on good news than in short on bed.

First entry, just to show you my general idea is about recent EURUSD price action. Of course everyone can be smart now as it already happen :)

Here's some picture of last month:

There is nice channel that could have been easily spotted on a daily chart, bears were in the air, however there was one "but" there was no reason for price to go down on Monday 27.04 - where vertical line is placed (or maybe there was?).

Unexpected move [20:00 on a 30M chart] brought me to thought, that the one who sold all that euros may need his money back, so today I felt strong tension to not take short anymore, but rather wait for spike. As you can see I was kept in uncertainty till beginning of American session but finally proven to be right :)

To be honest it was even better then I expected, note that 5pm on this chart was the time when US consumer confidence (nearly 10 points better than expected) was released - this move is for me reason to give up 1.29 target and stay away from market.

Hope that it's clear what am I trying to snip. Any comments or questions, just ad in comments.