Monday March 13, 2017 - 08:28:58 GMT
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Forex Trading Ideas For Monday 13 March 2017
Trading Ideas for 13 Mar 2017
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WEEKLY Forex Economic Calendar:
14 Mar Tue
13:30 US- PPI
15 Mar Wed
13:30 US- Retail Sales
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- FOMC Decision
16 Mar Thu
03:00 JP- BOJ Decision
12:00 GB- BOE Decision
13:30 US- Weekly Jobless
13:30 US- Housing Starts/Permits
17 Mar Fri
14:15 US- Industrial Production
15:00 US- Univ of Mich (prelim)
- The USD is opening the new week mixed. The initial focus is expected Fed rate hike Wednesday. One exogenous factor could be a major No'reaster which is expected to hit Washington, New York and Boston with heavy snow, winds and flooding.
- Oftentimes in forex things just don't work out as planned. This is why we warn against trading on "conventional wisdom". Using "conventional wisdom" can make you a member of the "pack". I know because I have often fallen into that trap. We all know what happens when everyone moves to the same side of the boat. On Friday, markets were universally expecting a strong U.S. employment report, based on a number of often reliable advance indicators. The data proved to be solid, but it was not the blockbuster report that everyone had been expecting. Notably the average hourly earnings data missed once again. From a trading perspective, if everyone is already long a currency (USD) , or a stock, etc., who is left to buy it from you at a higher price following as expected news? Beware traing with the the crowd. It can only end in tears.
- Secondly, there was a tip-off early that things were not right. If "everyone" was expecting a strong U.S. report, as "everyone" appeared to be, why was EURUSD trading ABOVE 1.0600 before the release? My tentative plan early in the week had been to short the EURUSD heading into the data, but despite rising bond yields etc., I sensed that the trade was simply not coming together. Something was not right. So I aborted that plan. Then on the day of the release, my initial idea had been to sell EURUSD rallies. However, from the release of the report, the Amazing Trader program was telling me not to make that trade. It was flashing Buy signals. By listening to it, I was able to stay out of trouble in spite of my basic instincts. You might want to test it out to see if it can help you also!
- There appears to have been a large flow in the back end of last week out of the JPY into the EUR. Be alert to see if this flow is continuing. With the European economy expected to recover next year. investors are already starting to buy European stocks. Jay has susggested that they may financing these investments in JPY. This is called a "carry trade". You borrow funds "cheaply" in a depreseed currency to buy an asset in a stable to strong currency and hope to make money on both sides of the transaction. Keep7 a close eye on the EURJPY cross as interest in the strong USD trade starts to wane.
- The calendar starts out slowly this week, but as you can see above, there should be a lot to focus on from Wednesday onwards.
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