Pipcrawler

Okay, for those who have been following my trades for a while, you know that November has been a frustrating month for my “Picks” and last night was no different. As expected, the market drifted lower during the morning Euro trading session and our short entry at 1.8875 was triggered.

For tonight’s pick, we’re gonna hop on this wild ride called “Cable” and ride it down as the Greenback has been gaining ground against it as of late. We have a couple of big data reports coming up today with GBP Retail Sales number and US CPI data.

The classic scenario of “buy the rumor, sell the fact” played out early this morning as GBP/USD dropped as soon as the Bank of England announced that they raised rates to 5.00%. Unfortunately for us, the pair was about 100 pips away from our entry order right before the statement release.

November seems like “déjà vu” as we have a rocky week of three consecutive losses like in the beginning of October. I think it’s time to take a step back, clear our heads, and be fresh and ready for next weeks trades. So, no “Pick of the Day” this evening. Well, just accept the losses as a part of this wonderful business we call trading and go have an early weekend!

Apparently, the markets took the Democratic win of the House as a good sign as the USD, among other markets, was bid up as soon as the US markets opened up for trading. We were expecting a down US Dollar if the Democrats took control of either the House of Representatives or the Senate, but of course, the market surprised us and went against our trade…

Now that the Democrats have taken the House and may tie with the GOP for Senate control, we can get back to economic data. I think a lot of traders have stayed on the sidelines to avoid the choppy markets that the mid-term elections and lack of data have produced. We have a couple of significant events coming up with the Bank of England rate decision and the US Trade Balance report.

We’ve seen a huge USD sell off, US economy is slowing to a possible recession, and we have Non-Farm Payrolls expected tomorrow to report 125K new jobs were added. So, what’s a trader to do you ask? I say nothing. Everybody and their mama is waiting for this report, and once it’s released we’re going to see very, very dangerous trading conditions. If you are able to put in limit entry orders before the release or try to jump in at the market price after the report, you’ll probably experience slippage and get killed.

Traders are waiting for the NFP report on Friday to make a move, so very little action to speak of today. No trade triggered as the market never came anywhere near our support and resistance trades. With that said, let’s get ready for Non-Farm Payrolls!

We have one more trading day before the release of the Non-Farm Payrolls report on Friday, which means we will probably see more consolidation ahead of the report. We do have US economic reports starting at 8:30 am EST, but nothing significant enough to move the markets. The European Central Bank will be making an interest rate statement tomorrow at 7:45 am EST, and ECB Pres. Trichet will comment afterwards, but the markets are expecting no change.

Well, my contrarian ideas on the current market sentiment proved to be wrong this trading day, but I still think we will see a USD correction sometime soon. First, I had hoped for a market reaction to the ADP Non-Farm Payroll, but got none as the number was released close to expectations at 128K new jobs. ISM Manufacturing came in lower as expected, but the move was rather limited as the pair spiked up briefly before coming back to pre-news release levels. This tells me two things: