ForexSpirit

Lots of trade action to catch up with, starting with last Friday’s non-farm payroll.

Following my plan from Friday morning’s Daily Briefing, after price had made a big up move and hung around 1.334, I wanted to get in. This was in case of a move above the most recent high at 1.337. I placed a limit order and got an entry at a b-day level of 1.3322.

When price tanked on Paulson’s comments I had two resting limit orders in Q2, both of which got hit on the way down. One at 1.3247 and a second at 1.3222. These resting orders had been entered just after the initial downward spike that occurred after the non-farm payroll release, as I was looking to catch long entries on any further tentative dips. Price took off soon afterwards and so they were not hit, until of course the about-turn that was caused by Paulson’s interview on CNBC.

On Sunday night with price hovering around 1.324 I entered a hedge against my higher Q3 entry.

On Monday the only trade action was to close out of the hedge position that had just been entered on Sunday. Price never really moved below where I had made the entry for the hedge at around 1.3157 and as price continued to edge higher during the Monday NY morning session I exited the hedge for a 52 pip loss at 1.3209.

During the range bound trading before the FOMC meeting on Tuesday I closed out one of my Q2 trades for 30 pips. On the FOMC announcement I was able to re-enter again from my b-day level as price dipped just enough before taking off again.

Pre-empting a modest to poor reading for yesterday’s US retail sales number I entered a new Q2 position just before the data release. The US retail sales numbers caught most people off guard (including me) with the largest increase since July coming in at 1.0% (core: 1.1%), with electronics leading the charge. Obviously people really took advantage of those Thanksgiving sales. On the release of the data price dropped to 1.32 and got stuck there until this morning’s London session, where upon price went up to 1.325 before dropping back. It is currently in high Q1 at around 1.3285.

After the retails sales number I closed out one of my other positions for 19 pips as price was dropping. I re-entered at my b-day level of 1.3222.

The current move south on euro this morning looks like it was engineered to catch all the stops that would have been placed just under yesterday’s low. If this move is indeed just stop hunting that it should move back up during the NY session. Perceving this as a dead cat bounce I’ve entered a Q1 position at 1.3196.

Price action seems to be settling into another trading range, this time between 1.335 and 1.315. If we don’t have some decent moves to the upside towards what most people expect to be the highest that could be reached this year (around 1.35) then the pressure mounts for a break to the south side. Such a break could see euro back around 1.3, with a potential return to the previous grid (1.28 - 1.32).