ForexSpirit

I have been having slight technical difficulties the last few days -a trojan was screwing with wininet.dll causing net connectivity problems.  Found and fixed now.

I have initiated two entries in the meantime.  On Tuesday the 4th a comment from a Chinese offical about the possibility of China reducing its investments in the US caused a sharp decline for USD. I took a one lot entry as this was in Q4, with the expectation that the grid would most likely be moved up.

If I hadn’t been so busy fixing my tablet I would have taken profits at 50 pips, when it reached 1.23.

Today Dirk moved the grid up 200 points so it now goes from 1.2000/50 to 1.2400/50.  Neutral talk from the ECB caused a 100 pip drop.  The dovish tone opens the door to some euro weakness in the short tem.  Before I had a chance to read Dirk’s summary of the ECB meeting (again due to fixing my tablet) I had entered a two lot position close to 1.22 as Dirk had mentioned that banks such as Saxo would like to engineer a move down so as to load up on longs.

The sharp rise in the middle of the chart was caused by the Chinese offical’s comments, while the sharp drop near the right hand edge was caused by the ECB’s dovish talk.

I feel slightly uneasy about the current situation.  The short tem market sentiment has suddenly shifted to being short euro after a good few days of slowly building momentum to the long side.  A natural reaction and retracement perhaps?

One entry is just slightly above the new median line, the other is right on it.  As long as the medium term stays euro bullish this shouldn’t be a problem.

This is also a good first test to weathering out-of-the-money positions.  I could cut the positions to eleviate my uneasiness, but I think the right thing to do is to stay in and see what nonfarm employment comes out tomorrow morning; so let’s see how the market looks after that.  I can always scale out of the trade if euro continues to go south.

Neutral euro statement and positive US unemployment claims data helped in US strength today.

Important news for tomorrow is the US nonfarm employment change, unemployment rate and average hourly earnings.