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.