Terrorist Plot Foiled, US Trade Balance Better Than Expected.

What a day... This is one hell of a day, I'm assuming that I'm not alone feeling this. When it was the weakest time for the USD to be very data dependant and the terrorist planned to blow up airliners. This has caused the USD to act as a safe haven again, where the market always over-react in terrorist plots. U.K. police foiled a plot to blow up airliners bound for the U.S. in a series of terrorist bombings the government said might have been deadlier than the Sept. 11 attacks on New York and Washington. U.K. authorities arrested 21 people during the night, Deputy Metropolitan Police Commissioner Paul Stephenson said today. The attacks were aimed at United Airlines, American Airlines and Continental Airlines planes, the Associated Press reported, citing unidentified U.S. counter-terrorism officials in Washington. Heathrow, Europe's busiest airport, canceled incoming flights and air traffic was disrupted throughout the region. Aiding the USD, was the lower than expected US Trade Balance narrowed to $64.8 billion in June as shipments of business equipment from American companies to overseas customers reached a record. Imports were also the highest ever.

My trade for EUR/USD has been stopped loss with a 40 pips loss. One mistakes followed one another as I took a gold trade ( I don't know what got into me...) and I'm on a negative right now. I'm now planning to make some corrections in days to come if I don't have any margin call... again. I could always build up once again. I hope things won't be as shitty for me this time. Happy Trading

Confused Market, Which way?

Early of today where I was seeing huge profit from the USD/CHF trade I placed yesterday after the Federal Reserve decided to pause at 5.25%. Then, I interpreted the FOMC statement as rather hawkish that spur the dollar. I followed the trend. It proved right with a profit of 30 pips... it was a low one. I could've easiliy doubled that amound of pips made if I was just awake earlier. After I closed the trade with 30 pips, seeing that the market is still confused of which direction to persue, I've decided to maintain sidelined until a much clearer price movement is detected.

I then missed the good entry price for EUR/USD. Damn! This is a lesson and a valuable experience for me, an experience which could possibly bring me AT LEAST 50 pips of profit. Therefore, I've placed a trade at 1.2880, not a nice point of entry but I guess I'll rather risk 40 pips than miss the next big leg up which potentially could retest 1.2980 and now it's taken. It's been a few hours now and I see prices are somehow more stable and in convincing movements and I'm not really worried about it as I'll be seeing further consolidation by the EUR/USD with an expectation of a weaker than expected US Trade Balance, another indication that US is undergoing a transition phase to a slower economic growth. The market is very data dependant now, especially for the dollar bulls as the statement again said that they would consider to increase benchmark interest rates higher than the current level is economy growth is accomodating and inflationary pressure is still around.

According to my personal views, from the consecutively 17 rates hikes previously, it's just in the medium stage of slower economic growth as I felt that the Federal Reserve had done more than 'enough' to have inflation 'in control'. From the era of Alan Greenspan and now the baton passed to Bernanke, I'm not sure whether I should congratulations to him for being the Fed Chairman because it's now the toughest time and his credibility is on the line, adding the he's made some 'newbie' mistakes previously after he told CNBC reporter that the market misinterpreted his message from the Beige Book couple of months ago. This has put his credibility into serious consideration. So, he's got a tough job to do~ As I've said repeatly mentioned previously, interest rates hike on the current month would only take effect 6-9 months later. Chances are the interest rates will just be 5.25% throughout this year. Inflation contained or not, is no longer the market's concern as economic growth can't be risked into possible recession. I'm still keeping my options open for further rate hikes AND as part of the majority in the market, I'll be very data dependant. Many economists are predicting another rate hike this year and some are even bold enough to predict that interest rates would be as high as 6%! That's ridiculous I would say.

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Closed Trades
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Long USD/CHF @ 1.2245, TP @ 1.2275 (+30 pips)

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Existing Trades
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Long EUR/USD @ 1.2880, SL @ 1.2840

Gold has traded higher today as previous metal gained against the dollar and mostly because of the FOMC statement revised as rather less hawkish than expected. Gold is currently trading at %648.30 and reached a high today at 655.20. Another bullish in the previous metal could be triggered if weaker than expected US Trade Balance is reported. Same thing goes to all dollar denominated currencies. Today's trading is not really ideal for me and I'm very pissed with myself that I missed the entry. Anyway, Happy Trading!

Fed Paused at 5.25% + Hawkish Comments = Dollar Back In The Game.

It was widely expected that the Federeal Reserve will pause their benchmark interest rates at 5.25% in August. But what matters most was are they going to continue after this month? Inflationary pressures are still in talks when July reports showed inflation is still around the corner, but economy growth is visibly slowing down. So, I would say it's a wise move for the Fed to pause for a month and then keep options open for the remaining of the year.

For the Euro's report, Germany's industrial production posted an unexpected decline during June, as foreign demand for its goods waned. Production dipped by 0.4% from May, according to Economy Ministry figures. Germany's economy is the largest in Europe and it has relied heavily on export sales to drive growth as consumers spending has been subdued. However, over recent months inflation fears have increased prompting a rise in global interest rates that many analysts are worried may hamper growth. German current account of the balance of payments showed a surplus of EUR10.1 billion in June, the provisional results of the Deutsche Bundesbank said Tuesday. The current account surplus consists of EUR1.5 billion deficit in the supplementary trade items account and EUR1.6 billion deficit in services account. Further, the current account surplus includes net factor income of EUR1.4 billion as well as EUR1.5 billion deficit in current transfers account.

What was most interesting from the immediate reaction from the market was EUR/USD on extremely bullish which immediately pushed up to as high as 1.2893, never made it near 1.29, not to mention 1.30. As I had a trade Long EUR/USD @ 1.2820, I've moved up my stop-loss to 1.2840, securing myself 20 pips of profit. The trade was closed in a matter of 15 minutes time due to the stop-loss I placed to protect myself. Glad that I did it, because hawkish comments would definately regenerate dollar buying interest in the market, or at least I interpret it as hawkish. I was sidelined for 35 minutes diciding on what is the next step and analysing the statement from Ben Bernanke regarding further hike, and thinking and thinking, analysing what's the next best trade. I managed to convince myself that USD would have an upper hand in the short range and I go Long USD/CHF @ 1.2245. Hopefully I'll be right in this.

My trading technique has been very suitable for me as I always get into the right price before the next big move. It's been proven repeated since I got my margin call. I don't really use any techical analysis tools to make an entry (MA, MACD, Boilinger Bands... etc) but I do respect them and use them as a guide to my analysis. I'm only using candlestick chart, price movements, and fundamental analysis, which is also my best asset in forex trading. It works for me but I guess it really takes lots of thinking. I'm using a full leverage system with this technic. With stop-loss in place, lots to gain and a little to lose. But remember to give some time for your trades if it don't turn profit to you immediately, sometimes it needs time to be a profitable trade.

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Trades Closed
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Long EUR/USD @ 1.2820, SL @ 1.2840 ( +20 pips )

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Existing Trades
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Long USD/CHF @ 1.2245, Current SL @ 1.2260 ( +15 pips is confirmed )

Happy Trading!

USD gains vs. Euro A Day Before Rate Decision.

Euro failed to sustain the price of 1.2890 range when most traders took profit from the lower than expected non-farm payroll report. Most risk-averse traders are now sidelined from the trades waiting the confirmation from the Fed that the pause will be for good until the end of the year. Then USD would have no more reason to rally. But from what I'm expecting, Ben Bernanke wouldn't give a clear picture of the pause rather on data dependant on future rate hikes or rate cuts. But if a pause took place tomorrow, and uncertainty is in the picture, I would be on USD bearish.

My trades from Friday was triggered a stop-loss of a 50 pips profit lock today. I'm looking forward to go long on EUR/USD at 1.2820 trades and I'm still targetting 1.30 as my primary target. GBP/USD and XAU/USD was surprisingly standing strong against the dollar despite Euro had a roller coaster today. If the Fed is dovish, we could expect GBP/USD and XAU/USD to have the best currency performance. I am expecting tomorrow would be in tight range between Asian and early London session and volitility of price movements could start in early NY sessions, probably as early as 6 a.m. I'm hoping for the best to happen. Happy Trading!