Pipcrawler

It looks like I underestimated the correction as the pair rose up to our short entry, but kept on going! The pair finally found resistance around the 116.40 area before dropping as the pair sold off after the quarterly GDP report was released at 2.2%. Looks like a “buy the rumor, sell the fact” trade scenario would explain that event and how the pair rose after a weaker New Home Sales number came out weaker than expected at 1.0M new homes.

The theme in recent weeks has been a declining US economy and all of the weak US data have been supporting that. Today was no different in that we saw terrible US Durable Goods and US Consumer numbers come out lower than expected, but we got a mixed from the USD markets. Is it possible that the USD sell off is overextended? I would say maybe so – in the short term. This mixed reaction maybe a signal of a correction before more USD selling continues. With more potentially negative data coming out tomorrow, mainly in the form of US New Home sales, we may see the pair drift higher before taking a dive. So, we will look to short USD/JPY at 115.95 to hopefully catch a continued down move.

It was another “make-no-sense” day in the market as the US Durable Goods number came out WAY worse than expected. Couple weak US data with oil trading above $60 per barrel (stronger commodities usually correlate to a stronger Canadian Dollar) we should have seen this pair drop! But we didn’t and we watched our short trade trigger and reverse within the matter of minutes.

It looks like the pair is consolidating between 1.1300 and 1.1350 at the moment. Traders are patiently waiting as we will see multiple, major US economic reports tomorrow morning. At 8:30 am EST we have the Durable Goods Orders which is forecasted to come out at -5.0%. Then at 10:00 am EST we will see the Consumer Confidence and Existing Home Sales report, both of which are forecasting weaker than previous months numbers.

We were expecting a short and uninteresting week with the lack of any major fundamental reports and the holidays which kept traders in the US and Japan from their trading stations. For the most part it was pretty uneventful until that surprise USD selloff right before Turkey Day. This cause our only open trade for the week to stop out! Dohh!!!!

Man, did anyone see that US Dollar sell off coming?!? Traders everywhere, including myself, were expecting a muted trading session due to the US and Japanese holidays. We had a range strategy in the works for the final pick of the week before the holiday, but it was stopped out as the US Dollar sold off sharply in the low liquidity environment.

This will be the last “Pick of the Day” for the week as I will be taking off tomorrow to be with the family for the holiday weekend.

Tonight’s pick will focus on the Loonie and the Canadian Consumer Price Index report, which is to be released tomorrow morning at 7:00 am EST. Recent Canadian economic data has been significantly weak, especially today’s retail sales number which was reported much lower than economists forecasted at -1.2% headline/-0.9% core.

It looks like I over estimated the range that the pair traded in today as the pair never came close to our short entry and came within 5 pips of our long entry. So, no trade on a very boring trading day.

No Trade Entered.

We’re back to another wonderful week of forex trading, but unfortunately, it’s going to be a short and possibly boring one. We have a light economic release schedule this week, and with the US markets on vacation from Thursday on, we will probably see low volatility and maybe a spike here or there…pretty Much tough trading conditions. Don’t worry though, I’ve managed to come up with any idea or two this week, and for tonight we will be taking a look at EUR/JPY.

As I have said in my trade review, it’s been a frustrating month of November. Actually, even though we have come out positive in October and September, it’s been a frustrating few months. The forex market has been in a period of low volatility it hasn’t seen in a few years, making it a difficult trading environment for my methods. I am going to take an early weekend to clear my mind and reevaluate my perception of the current market environment.