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Today’s Trade Result: +15 pips
May 2012: +175 pips
April 2012: +203 pips
March 2012: +302.5 pips
February 2012: +288 pips
January 2012: +80.5 pips
December 2011: +67.5 pips
November 2011: +12.5 pips
October 2011: +965.5 pips
September 2011: +289.5 pips
Let’s analyze the market and review the events that took place overnight during the Asian and the European market hours. We’ll analyze these news as we look into today’s trading in the US market session of today Wednesday May 9, 2012.
This is a 7-part series on Forex Trading Strategies, Click here for my strategy #4: Support & Resistance
I have given a lot of thought into this topic, Market Psychology, and at the risk of oversimplifying it, the logics behind it is that traders are not machines and what affect traders will ultimately affect the market, and that’s why it is important to understand market psychology.
Market Psychology is defined as:
The focus of this week rested on the growth outlook of the largest economy in the world as we saw concerns after last Friday’s lower Adv. GDP reading for Q1 2012 followed by this Friday’s April US Employment (NFP) at third consecutive monthly declines. Considering the current context of the market, these two data points suggest that while the U.S. economy is improving at a moderate pace, it is a long and slow recovery. In the interim week, the April ISM non-manufacturing index dropped, the ADP report missed expectations by 51K, the April Dallas Fed index widely missed expectations, and the Chicago Purchasing managers’ index hit its lowest level since November 2009.
We´ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:
8:30am (NY Time) CAD Employment Change Forecast 13K Previous 82.3k
Unemployment Rate 7.3%
DEVIATION: 25K (BUY CAD @ 40K / SELL CAD @ -10K)The Trade Plan
The Canadian Employment Change report will be released at 8:30am sharp today (changed from the usual 7:00am). What I am looking for is a minimum deviation of around 25K, or the difference between the Forecast number (13K) versus the actual release number; if we get a positive 40K of release, we should see demand for the CAD rise, therefore we should BUY CAD against weaker currencies at the time; however, if we get a negative deviation, such as -10K or worse, we should see some weakness in the CAD, and that will be my cue to SELL CAD against stronger currencies at the time.
BOE (Bank of England) will be rendering its interest rate decision today, and it would provide strong volatility in the market if BOE´s final decision turns out to be a surprise, here´s the forecast:
7:00am (NY Time) UK Official Bank Rate Forecast 0.50% Previous 0.50%
APT (Asset Purchasing Target) Forecast 325B Previous 325B
DEVIATION: 0.25% interest rate / 25B Pound for APT
(BUY GBP @ +0.75% rate / SELL GBP @ +350B APT)
Australia Employment Change is similar to U.S. NFP (Nonfarm Payroll) and Canada Employment Change, this is an economic indicator for the Employment Changes in Australia, here´s the forecast:
9:30pm (NY Time) AU Employment Change
Forecast -4.2K Previous 44.0K
AU Unemployment Rate
Forecast 5.3% Previous 5.2%
DEVIATION: 25K (BUY AUD @ +20K / SELL AUD @ -30K)
Today’s Trade Result: +42.5 pips
May 2012: +150 pips
April 2012: +203 pips
March 2012: +302.5 pips
February 2012: +288 pips
January 2012: +80.5 pips
December 2011: +67.5 pips
November 2011: +12.5 pips
October 2011: +965.5 pips
September 2011: +289.5 pips
Let’s analyze the market and review the events that took place overnight during the Asian and the European market hours. We’ll analyze these news as we look into today’s trading in the US market session of today Wednesday May 2, 2012.
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