Good morning traders.
A pretty uneventful day yesterday as we wait for the monthly non farm stats out of the US this afternoon. Our fast moving preferred choice of wildly inappropriate wealth accumulation (!) backed off from the 1.1250 highs printed on Wednesday, had a quick look at 1.1205s and decided to sit tight just above this level for the rest of the day. To be expected I guess with the monthly whipsaw fest slated for 2.30 CET later today.
It did at least make a mockery of my analysis from yesterday stating that in my opinion we would get a further up move based on the day counts of the previous swings up from key lows. The market is nothing if it can´t make you look like a complete dud when it comes to trying to figure out what its going to do, lol. I´ll take it on the chin and move on while quietly cursing its contempt for my predictive capabilities :).
That said, we did get a trigger from S1 but it didn’t get very far. If you held overnight you should have been able to bag 20 pips or so but I generally close out my day trades as I did yesterday for +10.
Risk held firm again in the expectation of a successful outcome to the US China trade talks.
For today its all about the Non Farm Payroll numbers. On the past few occasions all we have seen is a whipsaw up and down around the price at announcement to burn unsuspecting traders with a resolution back at the start price. In which case I suggest you wait until after the numbers to see how the dust settles before deciding whether there is a decent trade or not.
My plan on NFP days is to take any scalp set ups in the morning and sit out the event itself. It is quite possible to trade it, but its not my cup of tea.
The Daily Chart
The doji at the low is still in tact but the reversal from the 1.1250s and the 23.6 Fib isn’t great for our up move perspective. I don´t think its that significant though. We need to see how the week closes to get a better picture.
Today will give us more information as to whether the USDx is going to back off or not. As we have said in the past, one scenario is we could be looking to carve out a lower range and from a macro monetary policy pov nothing has changed re the relative strength of the USD and the euro.
If we get a close below the Tuesday low this would look increasingly likely. If we get a firm push up today then next week I´d be more inclined to look for higher prices up to 1.13 and if we get a jog on, up to the 1.1450 level. We will know more at the close of the week and take another look for Monday.
The Hour Chart
No model levels for today although I have still marked up the chart with the levels and zones that look promising.
As said above, look for any scalp trades in the run up if you´re so inclined otherwise sit tight and let the chart do the work.
Have a good weekend dear reader and remember – tight lines for today (it’s a fishing analogy in case you haven’t the foggiest what I’m talking about :).