If you did any trading today, then you know that I’m referring to the dollar rally that occurred. In fact this whole week, the dollar has been making gains across the board. Today was pretty interesting though because the dollar actually broke the 2700 level against the Euro. If you’ve been watching that pair, you know that it has been trading between 2700 and 2900 for some time now. That’s why this break of 2700 is pretty significant. It looks like with the stronger than expected US data such as the labor costs and ISM, traders are speculating the Fed may still raise rates one more time before the year end.
Looking at the Fed funds futures rates, it still looks like only 20% of traders think the Fed is going to raise rates in October, but you never know what could happen in December.
I’m thinking with all the existing long Euro/Dollar short positions, many traders are covering their positions. This is probably what caused the big drop today. Now we are in sort of a “no mans” land. Yes we’ve broken the range, but will the market continue to rally towards the dollar or is this just a false break? Could this be a true comeback for the Dollar or is it just a failed comeback attempt like the way James Blake failed on his comeback attempt against Roger Federer in the US Open? The answer? Thats right….we need more data. There wasn’t much to go on this week so we’ll have to wait for more significant reports to show dollar positive results to see a further push in the EUR/USD.
With the AUD/USD, there has been a strong dip which is what I expected. Now I am waiting to see if it can break the 20 day high that it made 2 days ago. However, if the US keeps churning out positive reports, we might just see this pair continue to drop.
I had an Alba loss yesterday but recovered most of loss with a win today. The sharp drop in the EUR/USD helped me grab a good amount of pips and I’m at about breakeven for the week with Alba. With the EUR/USD finally making some movement, we’ll see if Alba can produce more trades and break out of this dry spell.
Well thats it for this funktifiably fresh pippin magnet. I hope you all have a groovy weekend!