NON-FARM PAYROLL TODAY
HOW AM I APPROACH THE FX MARKET?
Basically after yesterday’s huge sell-off with the EUR (EUR/USD +225 pips) and GBP (GBP/USD +110 pips), I would really like to write that we would now be consolidating the grossly oversold conditions in many of the currency pairs. Certainly overnight through the Asian and European sessions little sparks but overall I would call it consolidation.
That peace and calm could all end later this morning with the next release of U.S. Non-Farm Payroll statistics. I am thinking that maybe on this occasion, instead of the usual swings and huge volatility associated with this news release the Forex market may not be “Up for it” even the Employment numbers are blow out numbers. I have no idea what the numbers are going to be but the FX moves yesterday were so big, I really do wonder if the markets have the belly for it?
I am going to wait until about 10-15 minutes after the numbers have been released, let the knee-jerk reactions take place and see if we have directional moves and then decide.
What levels interest me?
Had today not been an NFP day, I would have been writing today about waiting for pullbacks before entering into the established directions. But as a trader, you have to have a PLAN and you should always TRADE YOUR PLAN if conditions meet your PLAN.
I am looking at only 4 currencies to trade out of NFP.
EUR/USD, AUD/USD, NZD/USD and USD/CAD
I may not trade them all but I have my levels of interest to look to buy at or to short at, plus if the moves are strong I know when to reduce my position size as these levels become within striking distance.
EUR/USD: Support is at 1.2915. Resistance is at 1.3000. (L/T - BEARISH)
AUD/USD: Support is at 0.9300. Resistance is at 0.9430. (L/T - BULLISH)
NZD/USD: Support is 0.8250. Resistance is at 0.8350. (L/T - BEARISH)
USD/CAD: Support is at 1.0810. Resistance is at 1.0910. (L/T - BULLISH)
These are my awareness levels.
The EUR/USD is now in a definite bearish trend. My plan with the EUR/USD is to short on rallies towards 1.3000. I know that as it approaches 1.2915 I need to reduce my position size. If 1.2915 support holds I have the option of closing the trade and maybe look for a bounce back towards 1.3000, or, hold for a short time looking for the pair to resume the downward move, adding to my trade once it has confirmed it’s move below 1.2915.
So with all the pairs that I have listed my approach is simple. On the bullish trends I want to buy the dips and on the bearish trends I want to sell into rallies. I will only ever trade small, if at all, on Non-Farm payroll days and should my trades play out I will add to my existing positions early next week. I am expecting some directional moves next week.
I have my plan and I will TRADE MY PLAN if the trades set up for me. If the trades do not set up I stay sidelined in $$$$. I can only react after the news has broken. I may not even get a chance to trade my selected pairs. Only time will tell later on.
Scott Pickering
The Pip Accumulator
HOW AM I APPROACH THE FX MARKET?
Basically after yesterday’s huge sell-off with the EUR (EUR/USD +225 pips) and GBP (GBP/USD +110 pips), I would really like to write that we would now be consolidating the grossly oversold conditions in many of the currency pairs. Certainly overnight through the Asian and European sessions little sparks but overall I would call it consolidation.
That peace and calm could all end later this morning with the next release of U.S. Non-Farm Payroll statistics. I am thinking that maybe on this occasion, instead of the usual swings and huge volatility associated with this news release the Forex market may not be “Up for it” even the Employment numbers are blow out numbers. I have no idea what the numbers are going to be but the FX moves yesterday were so big, I really do wonder if the markets have the belly for it?
I am going to wait until about 10-15 minutes after the numbers have been released, let the knee-jerk reactions take place and see if we have directional moves and then decide.
What levels interest me?
Had today not been an NFP day, I would have been writing today about waiting for pullbacks before entering into the established directions. But as a trader, you have to have a PLAN and you should always TRADE YOUR PLAN if conditions meet your PLAN.
I am looking at only 4 currencies to trade out of NFP.
EUR/USD, AUD/USD, NZD/USD and USD/CAD
I may not trade them all but I have my levels of interest to look to buy at or to short at, plus if the moves are strong I know when to reduce my position size as these levels become within striking distance.
EUR/USD: Support is at 1.2915. Resistance is at 1.3000. (L/T - BEARISH)
AUD/USD: Support is at 0.9300. Resistance is at 0.9430. (L/T - BULLISH)
NZD/USD: Support is 0.8250. Resistance is at 0.8350. (L/T - BEARISH)
USD/CAD: Support is at 1.0810. Resistance is at 1.0910. (L/T - BULLISH)
These are my awareness levels.
The EUR/USD is now in a definite bearish trend. My plan with the EUR/USD is to short on rallies towards 1.3000. I know that as it approaches 1.2915 I need to reduce my position size. If 1.2915 support holds I have the option of closing the trade and maybe look for a bounce back towards 1.3000, or, hold for a short time looking for the pair to resume the downward move, adding to my trade once it has confirmed it’s move below 1.2915.
So with all the pairs that I have listed my approach is simple. On the bullish trends I want to buy the dips and on the bearish trends I want to sell into rallies. I will only ever trade small, if at all, on Non-Farm payroll days and should my trades play out I will add to my existing positions early next week. I am expecting some directional moves next week.
I have my plan and I will TRADE MY PLAN if the trades set up for me. If the trades do not set up I stay sidelined in $$$$. I can only react after the news has broken. I may not even get a chance to trade my selected pairs. Only time will tell later on.
Scott Pickering
The Pip Accumulator
