Technical Analysis

The dollar made another push against the majors after the import price index showed a rise in both import and export prices. The Import Price Index compiles the prices of goods bought by the US from other countries as well as the prices of goods that are sold by the US to foreign countries. This report provides good indications as to what the CPI and PPI report will say because it measures inflationary trends on bought and sold international goods.

So the story of the day was the Retail Sales report which came out at 8:30 am EST. Both the overall and core retail sales report came out unexpectedly higher than expectations which caused the dollar to rally today. The consensus for the overall report was 0.1% with a forecasting range of -0.3% to 0.3%. The actual number came out at +1.0%. With the core retail sales report which excludes automobiles, the consensus was 0.3% with a forecasting range of -0.2% to +0.4%. The actual core number came out at 1.1%. So who cares about the forecasting range?

You’re probably wondering where I was on Friday and Monday since there was no post. Or then again, maybe you’re not, haha. Well just to fill you in, me and the rest of the FX-Men were in the fabulous city of Las Vegas for the FXCM Traders’ Expo. There were great speakers like Kathy Lien, Boris Schlossberg, and Jack Schwager. Then there were boooorrrring speakers like…uhh what was his name again? And finally, there were awesome speakers like Jes Black and Jim Rogers. The best part of course was the fact that the conference was in Vegas baby!

Well the ECB raised rates as expected. The BOE held rates as expected. No aggressive statements were made, and the Dollar made another small push. If you look at today’s action in the majors and compare it with yesterday’s action you would see a mirror image of movement. The majors moved almost exactly the same way they did yesterday which tells me that the traders are waiting in anticipation for tomorrow’s NFP report.

Today was much more of a technical day since there weren’t any major fundamental reports out. All the majors looked poised for a reversal and today, they finally followed what the technicals have been showing. Don’t get me wrong, some fundamentals did play a part. GBP Industrial and Manufacturing production numbers were negative as was the German Factory Orders. On the dollar side, a report showed that US companies added more jobs for the month of June. This could be indicative of the upcoming NFP report on Friday which could suggest that the labor market is still kicking.

Hello everyone. Thank you very much for emailing us all the little bugs you are finding on the site. We knew it wasn’t going to run perfect from the start so we covered our tails and called this our “Beta” version haha.

It’s been a fairly quiet day in the majors with only moderate movements in the Cable and Yen. Unfortunately my darn Yen trade didn’t work out like I wanted to while my Cable analysis was right on point. At the time, the Yen seemed like the better looking trade, but I should’ve known that the 15 year high that the Cable is at right now would have a been the better currency to fade since it’s at a very extreme level.

After a long wait, it’s finally here….BabyPips.com Version 2.0! It’s been a very long project; one that we have been working on for more than 6 months now, but we are very excited because we think it will provide even more value to you as a learning Forex trader. I never knew that building a website could be so hard! I definitely have a new found respect for all you “internet geeks” who possess the skills to design and create bodacious websites. Without you, we’d all be stuck having to read ugly web pages, and probably get massive headaches from trying to read a screen with non-matching colors, inappropriately sized text, and constant error messages. So from the bottom of Big Pippin’s heart, I’d like to give you mad props for being the true “Playas” of the virtual world! With that said, I’d like to start today’s post off by explaining some of the new features we have added to this pimped-out site.

My suspicions were correct about the Dollar not being done taking its beating. After some profit taking yesterday, the Dollar once again resumed its meltdown as it plummeted agains the 4 majors today. The main reason for the drop? More bad economic releases for the US. The job market, which was once strong, is now starting to look like it may have some weakness as unemployment claims unexpectedly rose. To top it off, the Chicago PMI contracted below 50 which is the first time it has done that since April 2003.

The dollar made a little bit of a comeback but I’m not fully convinced that this is a true reversal…..YET! Sure the GDP came out higher than expected but New Home Sales dropped so the dollar is still not out of the mud. Today’s dollar gain looks more like some profit taking by the sellers over the Thanksgiving holiday. We only saw a slight retracement in the majors and I’m not fully convinced the dollar is done dropping.

The dollar took another beating today as all the US fundamentals came out negative and confirmed the notion that the dollar’s rise is over. Durable goods and Core Durable goods both came out lower than expected and housing prices fell for the 3rd straight month (Interestingly enough, existing home sales went up which means we have some discount buyers out there). Right now everything is looking gloomy for the dollar and there might not be much that can keep it from falling.

So there I was, stuffing my stomach with deep fried turkey, mac and cheese, succulent ham and all the other fixins and all the while the market was making huge moves. The last thing I said before I left was that I seriously doubted that the markets would move. Boy was I ever wrong! That just goes to show you that you should never completely “listen” to me. I mean sure, I am the best looking member of the FX-Men and many times it seems like I have superhuman abilities to foresee the market, but at the end of the day, I’m just a handsome analyst who makes a best guess decision on market movements based on what I see is going on around me.

Thanksgiving is fast approaching and while I’m excited about stuffing my face with an endless supply of delicious home cooked food, there is something even more exciting that is putting a twitch in my trading finger. It’s called “Black Friday” and it refers to the one day a year when stores have ridiculous discounts so that the US consumer can start their annual Christmas shopping. This means waking up early, standing outside stores in huge lines, and fighting the mob for all the cool new gadgets stores have to offer. The day after Thanksgiving sparks the start of Christmas which to me could spark a short term growth in consumer spending.

This week is going to be dull. Personally, I am already thinking about the gorgeous turkey that I will be devouring on Thanksgiving. With hardly any economic reports due out this week and the fact that Thanksgiving is on Thursday, I don’t expect too many things to happen in the Forex world. Last year I ended up losing 3 straight trades on the 3 days right before Thanksgiving so I will only be taking a trade if I see a really good setup.

The dollar rose slightly due to the higher than expected TIC data and Philly Fed Index. However, the gain was held back by a lower CPI (which we already knew was going to happen because of the low PPI number on Tuesday). The GBP retail sales also rose higher than expected. All these factors led to a lackluster day in the majors as the pairs pretty much stayed put.

Happy Friday to everyone. It’s been a pretty dull week in the currency market due to the lack of economic reports and most of the movement has been based on various statements from head honchos of different countries. It’s true we’ve seen plenty of spikes but a clear directional trend is still up in the air. I’m going to keep this update short because it’s Friday and I want to start my weekend already!

The BOE raised rates to 5.00% and yet the Cable drops. Although this was probably already priced in the market I would’ve expected the Cable to rally on this announcement. That wasn’t the case. In fact, the Cable dropped after the interest rate announcement. An hour and half later, the US trade balance comes up narrower than expected (bullish for the dollar) and the Cable dropped some more, which seems logical. However, the crazy thing is that an hour after that, the Cable then proceeded to rally higher and ended up spiking to almost 9100 again. Talk about a roller coaster day for the dollar!

It was a pretty dull day in the markets regarding fundamentals. Nothing too extreme has happened in the past 24 hours. However, the Democratic party did take control of the House of Representatives. Now this gives them the power to block government spending and reverse tax cuts. Like I talked about yesterday, this will create a power gridlock since one political party no longer controls both the House and Senate. When this happens, it becomes negative for the dollar because policies become harder to pass.

Bank of Japan governor Fukui said that they will adopt a forward-looking approach, and take action (against rising prices) in advance, moderately. Or, in layman’s terms, the BOJ is probably going to raise rates again. And when a big bank leader says something like this, it usually means good things for their currency. This statement sent the Yen in a frenzy and as a result, it kicked the dollar’s ahem…”rear end” today.

Don’t say it’s a conspiracy! Can someone please tell me how September jobs went from 51,000 to a “revised” 148,000? That is complete malarky! With elections coming up, it’s no wonder why the numbers are “misleading”…(get it?) For cryin out loud, can someone just please tell us the truth?