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Thread: $ For The Week of 11/6-With Trade Ideas

  1. #1
    Where does the $ go from here?


    My view? Now's the time if you need to sit back and see just how all of this NFP material is gonna workout and the way the market is gont be interpeting it. Yesterday, yes I understand the $ gained, but I'm not so sure we've seen the conclusion.

    The market has thrown out the validity of the monthly amount; it is responding strictly off the revisions. My question is that if the monthly amount is bad, will be the numbers any better? Since the BLS has time to operate on them? I'm not so confident and at this time, until I see further market reaction I'm not sure that the several markets (bonds, currencies, equities) feels sure either.

    What do you need to do as a person trading the currency market? Research. Follow up on BB, Reuters the NY Times and everywhere else you can. Do the due diligence. Watch the bond market, especially the 3 month and 10 yr notes. Most importantly, see the Sunday open.


    Remember that people vote with their $'s. If the $ reinforces farther (to the lower 8700's versus the GBP, about where it was prior the the last FOMC), that tells me the market ardently believes in these numbers. If it remains relatively the same, that tells me that there is serious uncertainty and if it starts to weaken, this tells me that more and more individuals in the markets don't actually believe in the NFP numbers the gov't is putting out.


    I understand there are plenty of technical indiors that say the $ is still overbought and it is, if the NFP numbers are correct. I'm simply not so sure that they are and I'm not sure are the thinking is currently gonna perform. But I'm not trading in this enviorment until I see a move one way or another. In case you have a technical indior and a faith in the NFP numbers, maybe you have a for shorting the pound.

    Remember that unemployment (according to the BLS) and the GDP are in quite low levels. That means more and more employees are out-putting less and less goods and services.

    By Reuter's: Analysts said the jobs data adds to confusion about the market's direction, since it comes just a week after the government reported the weakest expansion in over three years in the third quarter. Gross domestic product slowed to a 1.6 percent annual rate of growth from 2.6 % in the next quarter.

    If all of the numbers are correct, that situation can't last for very long. Let us see what happens.

  2. #2
    Contradicting numbers huh?

    Is low GDP right?
    Is low unemployment right?
    Is high NFP right? (past 3 months have been revised WAY high!)
    Is high labour price right?
    Is low productivity right?

    IF I were to buy the amounts here's what I would interpret them:
    US is hiring expensive lazy workers!
    And that should be bad for the US market!

    I wont trade GBPUSD on monday. Its a wait and watch Asia and London would respond without US trader's interference. Personally, I prefer to USD vs GBP in light of the UK rate Hike come Nov 8. But hmmm... US Election is another variable.

  3. #3
    What's bond price associated with USD? If 10 year note, that means USD bond is cheaper, more people buy bonds? Subsequently cause USD to trend upward?

  4. #4
    I have changed my mind on trading in this enviorment. I believe now could be an excellent time to trade, but it should be based on the market's perception of what the NFP numbers mean. The action to take is to watch the markets initially trade.

    When the market believes in the amounts, further $ buying will likely be seen and there could be 100-150 pips of buying in this case, down to or near where the GBP was at the FOMC.

    When the market does not think in the amounts, with the GBP rate incr a clear certainty, we could observe the GBP up near the recent resistance levels in the reduced 9100's.

    My proposal would be to watch the open now and see what the market thinking is. I'd be considering a 25 pip plogical stradddle-let the price move 25 pips either way, take a little position with the tendency and perhaps add to it as the tendency becomes established.

    I feel the two greatest pairs to follow would be the GBP/USD and AUD/USD-based about the fact that both the GBP and AUD are tipped to be increasing their rates this week also that the $ augmented into that on friday. I personally don't follow the Yen, but it a fantastic idea to see Asian traders feel about things.

    There isn't very much US data this week. That's not until the 9th, although the Trade Bal will be the US amount that is most significant. The interplay between the NFP and the GBP/AUD interest rate rises should be quite intriguing.

  5. #5
    London Calling

    Some ancient buying of the GBP wasn't continuing in London this morning along with a plogical straddle of 25 pips or so should have gotten you around 15-20 pips/profit. It was worth watching as the potential for a large movement was there (considering the strength of the NFP revisions), but that didn't happen.

    A more powerful $ trend may be brewing. I tend to believe that NY will basically follow London's lead but I don't really find a huge quantity of movement for now either absent any shock fundamentals. That I can not, so it will be a day of watching for me if you see it differently you're seeing something. Do not neglect watching the bond markets, particularly the 3 month and 10 yr notes to determine how the thinking is there. Perhaps this is of any help: ?We are at a range where it doesn't make sense to make huge bets,? explained Webman of OppenheimerFunds. ?We are kind of neutral.?

    Full article:http://bloomberg.com/apps/news?pid=2...71YArefer=home

    We had some basically flat production info from the UK. This weeks BoE rate incr was probably traded and traders may be paring their bets to get a B0E rate incr. As the data unfolds, you just have to watch it. Here is some data that should be very interesting:

    http://bloomberg.com/apps/news?pid=2...43TiD8refer=ukU.K. manufacturing production unexpectedly stagnated in September as a U.S. slowdown along with a strengthening pound eroded overseas sales of goods such as electrical parts.

    Most traders consider support and resistance levels, but you want a better understanding of the fundamentals to obtain insight regarding why those levels could possibly be there. The fundamental law of demand and supply stays; A free market will always price goods and services based on what the demand will bear. If demand had continued to pick up as the pound rose, it is probably those resistance levels would have been broken, but that didn't happen. Demand slowed and also the price of the pound wasn't permitted to enjoy.

  6. #6
    Moskow is spreadin' a dollar love.

  7. #7
    Quote Originally Posted by ;
    Moskow is spreadin' a little dollar adore.
    He must have started to spread the love about 30 minutes later he began to talk ? Thats when the currencies began to view it

  8. #8
    Quote Originally Posted by ;
    he should have begun to spread the love about 30 minutes later he began to talk ? Thats when the currencies began to see it
    LOL, he explained further increases may be required. The market has not cared.

  9. #9
    Quote Originally Posted by ;
    London Calling

    Some early buying of the GBP was not continuing in London this morning and a plogical straddle of 25 pips or so should have gotten you about 15-20 pips/profit. It had been worth watching because the potential for a huge motion was there (considering that the potency of the NFP revisions), but didn't happen.

    A more powerful $ trend might be brewing. I tend to think that NY will basically follow London's lead about the GBP, but I don't really see a massive amount of motion either absent any surprise fundamentals. If you see it otherwise you are seeing something I can't, so it will be a quiet day of observing for me. Don't neglect seeing the bond markets, particularly the 3 month and 10 yr notes to see how the thinking is there. Maybe this is of some help: ?We are at a range where it doesn't make sense to make huge bets,? explained Webman of OppenheimerFunds. ?We are kind of neutral.?

    Total article:http://bloomberg.com/apps/news?pid=2...71YArefer=home

    We had some basically flat production info from the UK. This weeks BoE rate incr was traded and traders may be paring their bets to get a B0E rate incr. As the information evolves you only need to watch it. Here's some data which should be very interesting:

    http://bloomberg.com/apps/news?pid=2...43TiD8refer=ukU.K. manufacturing production suddenly stagnated in September as a U.S. slowdown and a strengthening pound eroded overseas revenue of goods like electrical components.

    Most traders consider support and resistance levels, but you will need a better understanding of the fundamentals to gain insight as to why those amounts may be there. The fundamental law of supply and demand stays; A free market will always price goods and services according to what the requirement will bear. If need had continued to pick up as the pound climbed, it's likely those resistance amounts would have been broken, but that didn't occur. Demand slowed and also the price of the pound was not permitted to appreciate further.
    I went short yesterday evening about the pound, and shut @ 1.8960 where I went long...
    But I visit a stubborn quantity of short traders trying to ch up any move to resell again...
    I think that the downtrend is not exhausted
    But I wonder : is your UK interest increase already priced ? ....
    A great US payroll revision and ism. . .is just a way to change the mood for buying $, but I believe US economy is not getting better at the moment. .

    Is a 150k revision something potential ?

  10. #10
    My view is that the BoE incr of this week was traded back and forth a few times already. The trading now will hinge about expectations for the meeting . Of course, a huge surprise either way (incr by 50 basis points or not any incr at all) will send the GBP spinning off into new territory. I'll definately be watching the statement, but just trade a surprise off.

    If the pound is sitting about where it's now and also the B0E doesn't increase, a 150-200 pip market off could be viewed. In the event of a 50 basis point 9000 to 9100 resistance levels might get shattered. Again, these moves aren't exactly what the market expects, but it doesn't cost me anything to see and find out what happens so why not take action? There might be an superb trade there...

    As a experiment-let's watch the EURO. It peaked in London at about 2715 and is currently (9.45 EST) about at the degree in NY. Let us see if the same thing occurs.

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