Non Farm Payroll Lowest Since September 2001, Big Bear Knocks On USD Hard.

Thank goodness it's another Euro day. Every traders in the world was nervous about the NFP data today as I will determine highly for the June 29 FOMC rate decision. The U.S. economy added fewer jobs than expected for a second month in May and wage growth slowed, suggesting employers were wary of stepping up hiring at a time when growth shows signs of cooling. The 75,000 gain in payrolls followed a revised 126,000 April increase that was lower than the government initially reported, Labor Department figures showed today. Economists expected a 170,000 increase. The unemployment rate fell to 4.6 percent last month from 4.7 percent. A weakening of the labor market may make it harder for workers to demand pay increases. Smaller wage gains help reduce the risk of inflation and provide leeway for those Federal Reserve policy makers leaning toward an end to two years of interest-rate increases.

It was said that a number lower than 150K is considered bearish USD. This clearly is one of the good start in diminishing the hopes for USD bull traders to get out of our way, the EURO bulls! Although this is a crucial report, but somehow it will still depend on the upcoming data from the US to show more about slower economic growth and inflation is contained. A confirmation from the Fed to pause the interest rates would be very helpful. We will roughly see the Fed's actions during the Beige Book report, 2 weeks prior the Fed FOMC Rate Decision. Other than super weak USD data, the Euro zone data proved once again that strong economic growth is happening in the Eurozone and much rate hike is needed. We saw the Eurozone PPI for month of April and yearly matched consensus, higher percentage than the previous month.

I've positioned a series of USD/ZAR trades all the way down and hopefully I will get break even at a higher price and close the negative trade I've held for such a long time. Currently these trades will continue to provide me daily interest and hopefully it's enough to breakeven with the interest I have to pay to EUR/USD and Gold. I was holding only 2 USD/ZAR trades yesterday and it's insufficient to cover these interest that cost me 5 cents per day. As I've not fully recovered from my losses in gold yet, I wish not to get drained from this daily interest that's charged on me. For EUR/USD, I've a complete series of 50-pip trades all the way up to 1.3010. I will start taking profit when EUR/USD reaches 1.2960 and so on. As for USD/CHF, I still have to manage 2 negative trades and as these trades were made on early stages of my trading with low leverage, I should have no problem handling the negative. Gold has finally shown some light on me as the price went back up easing my account with more margin available. I'm prepared to take another trade in Gold on breakout level $666.00. Yup, the devil's number.

=============
Existing Trades
=============

Long EUR/USD @ 1.2800

Long EUR/USD @ 1.2860

Long EUR/USD @ 1.2910, TP @ 1.2960

Long EUR/USD @ 1.2960, TP @ 1.3010

Long USD/CHF @ 1.2280

Long USD/CHF @ 1.2380

Short USD/ZAR @ 6.7000

Short USD/ZAR @ 6.5800

Short USD/ZAR @ 6.0500

Long XAU/USD @ 648.80

===================
Trades I'm Waiting or
===================

Long EUR/USD @ 1.3010, TP @ 1.3060 ( 50-pip trades )

Long XAU/USD @ 666.00

Short USD/ZAR @ 6.5000

I will try to take advantage of this USD bear sentiment to try gaining as much as possible and hopefully gold is able to return what I've lost to the market previously. I will expect the EUR/USD will breach 1.3000 within next week as the ECB rate hike will take place. May the best happen to all Euro bull traders.

ISM Manufacturing Index Changed the Direction for USD, Saves Euro

Yesterday was totally an 'Euro Day' as the market continuously showing higher than expected data which proves strong economic growth in the month of May that might cause the ECB to take stronger movements next week in the rate decision. What's happened was what I called the 'left-over' sebtiments from the FOMC minute that was more hawkish than expected has caused this unduly rally in USD, ignoring the Euro data. What seems to be now is the market is more interested in the 'unsure' Fed decisions rather than the '100% sure' ECB rate hike. That's what puzzles me...

However I've taken strong positions against the USD and placing my positions on Gold and Euro. Prior to the ISM Manufacturing index, which was expected to be lower... I've closed one of the USD/ZAR which I took yesterday at 6.6992 at a loss of $2 because at the present moment Gold has taken up almost 17% of my available margin and leaving only $3 to flow around. I couldn't simply afford a margin call then I decide to close the trade, even with small loss. I feel that decision was made wisely considering the options I had. I then closed another USD/CHF trade which I took at 1.2240 with only a small profit giving me more room for Gold to move around, as I strongly sees that the low prices will generate interest in some traders. I've then position a trade at 1.2800 to ensure myself I don't miss any big movements up if a reversal happens. From the candle chart itself, even the day was fundamentally driven but from the technicals it was positioning itself in a reversal formation. These signs were seen in USD/CHF and EUR/USD 1 hour chart @ 21:00 or 1 hour before ISM Manufacturing Index were released. Based on the candle chart's reversal sign and fundamentally expectations from ISM Manufacturing is low, I've boldly closed my USD/CHF trade which proves me I was right in that decision and now I would have 1 less negative trade to manage. These ISM Manufacturing numbers were crucial yesterday as a stronger than expected number would prove that the US economy in May were still growing still growing even with high interest rates. That would boost USD to at least a new level of 1.2400 yesterday with the expectation from the Fed even more to raise interest rates of another 25bps. Fortunately, as what I and many other traders do believe is that the high interest rate has been a burden to the present US economy and slower growth in manufacturing is imminent. The numbers reported were much lower than consensus, signalling slower growth which will add another reason for the Fed NOT to raise interest rates in June. More weaker than expected data will be beneficial in Gold and Euro especially the Non-farm Payroll today @ 08:30 EST which is expecting 170'000 jobs.

===========
Closed Trades
===========

Long USD/CHF @ 1.2240 Closed @ 1.2266 ( +22 pips )

Short USD/ZAR @ 6.6992 Closed @ 6.7593 ( -601 pips )

============
Existing Trades
============

Long EUR/USD @ 1.2800

Long EUR/USD @ 1.2860

Long EUR/USD @ 1.2910

Long EUR/USD @ 1.2960

Long USD/CHF @ 1.2280

Long USD/CHF @ 1.2380

Short USD/ZAR @ 6.0500

Short USD/ZAR @ 6.7000

Long XAU/USD @ 648.80

In political views, the talks in Iran about the Nukes are making the Oil trading at $71 which indirectly affects the price of gold. Plus the hurricane season in the US has started, therefore I will see price of gold resuming it's uptrend rally soon. I'm losing $0.05 cents everyday due to the interest rates from Gold and Euro, I will take more trades in ZAR if I'm seeing it increasingly more necessary to do so in a few days time.

Strong Euro Data vs. FOMC Minute & Chicago PMI

Range trading seems to be getting into the lives of every forex trader nowadays. It's been 2 weeks since it's been like this everyday, minimal movements during the Asian & London session and slow movements were only seen in NY session. Today I've my bet on euro bull as according the the data which came all much better than consensus and the Fed raising interest has become an issue that will cause slower economic growth in the US. I'm currently looking in medium-long term of what would the sentiment in the end would be. The Chicago PMI is reported ridiculously high for the month of May which has caused by profit-taking in gold. So the clear picture will be known later at 14:00 EST where the FOMC minutes of May 10 will be released. If the Fed decides to raise interest, I add 2 more USD/CHF trades adding to my existing 3 USD/CHF to protect my losses and hoping to see it hitting a high of 1.2430. If the FOMC decides to pause the June 29 rate hike, we would most likely see EUR/USD settling above 1.2900 before NY closing and even probably hit 1.2970 which will bring us back to EUR/USD bull trying for 1.3000. I will then have a series of 50-pip trades following on the EUR/USD bull. I have bought an unit of gold at 648.80 and I don't intend to let it go with a loss this time as I've devastated my account with my move. I've learnt alot more about this system I'm working on and my experiences this 2 months has improved me significantly in forex trading eventhough I'll still have alot to learn.

============
Existing Trades
============

Long EUR/USD @ 1.2860

Long EUR/USD @ 1.2910

Long EUR/USD @ 1.2960

Long USD/CHF @ 1.2240

Long USD/CHF @ 1.2280

Long USD/CHF @ 1.2380

Short USD/ZAR @ 6.0500

Short USD/ZAR @ 6.6692

Long XAU/USD @ 648.80

+166 pips : Eur makes a comeback after holiday...

I skipped updating the blog for Friday because there were nothing new and special to mention. All was the boring range trading. Today's market has been bullish for Euro starting from the Asian Session where a retracement in the dollar bear has caused USD/CHF to dropped 80 pips. I then decided to take profit and it was the right thing to do. With these profits taken, I've managed to cover some of my losses created by my gold trade previously. Seems that the market has turned Euro bull for the week with plenty more of euro data to come. The drop today was started with that the rising inflation in the US will cause slower economic growth if the Fed decides to increase the interest rates for the consecutively 16th times to 5.25% in June 29. Then, it was continued by the news of Don Evans to replace John Snow as the new Treasurer Secretary which favors weak USD to support more exports of the US industry. However, this piece of news was later called a 'bluff' when Bush nominated Paulson as the new secretary on NY session. Another piece of news that was supportive to the dollar bear was the US Consumer Confidence which dropped from the almost 4-year high of 109.8 in April to 103.2 this month. This has brought the EUR/USD back to 1.29 range, which now it aims to the 1.2971, the high of May 15th and eventually to 1.3000. I will most likely not make any more trades on USD/CHF on this circumstances, but at least for this well expected Euro bull week.

=================
Close Completed Trades
=================

Long USD/CHF @ 1.2085, Closed @ 1.2175 ( +90 pips )

Long USD/CHF @ 1.2100, Closed @ 1.2176 ( +76 pips )

=================
Existing Trades
=================

Long EUR/USD @ 1.2860

Long EUR/USD @ 1.2910

Long EUR/USD @ 1.2960

Long USD/CHF @ 1.2240

Long USD/CHF @ 1.2280

Long USD/CHF @ 1.2380

Short USD/ZAR @ 6.05

==================
Trades I'm waiting for
==================

Long EUR/USD @ 1.2700

Long EUR/USD @ 1.2780

I will see Euro coming back for a retracement fulfilling the 5-wave theory from Elliots wave but maybe not the the extend of 1.2700. I am hoping that with all those data from the Eurozone this week. It could bring back the current market sentiment to Euro bull.