Please note: Always take what “experts” say with a pinch of salt. These same 82 guys will have shaken off their huge error of judgement, will still be collecting their big salaries and will be advising you again tomorrow!
As I predicted in Fridays post and the NFP video Price went sideways all morning on most of the pairs. The Chf (as shown in the above chart) was a classic example. Price remained in a tight range of only 30 pips. The Asian range overnight was only 22. Normally this would have been a brilliant opportunity for the M1 method, but the subsequent fake outs were again predictable which was why I told you not trade that method.
The candle before the news release the speculators started to short the $, guessing that the news would not be good. Then BANG. Incredible $US news (the previous months figures were revised positively as well) and away the $US went against all currencies.
Even more scary was the : Euro/Yen Nfp “gap” where you could have lost more than your stop
Euro/Yen Nfp gap Dec 2009
I also explained in the NFP video how you can suddenly find yourself in the terrifying situation where price has moved so massively , so quickly, that it has jumped and created a gap. If you were short on the Euro/Yen with your stop anywhere in the 70 pip gap, your trade would not have been “stopped out” but would have kept running further into debt( I have experienced this and its not pleasant).
You then have the awful situation where price is moving so fast that your platform won’t let you close the trade. You can keep trying manually and or try to get through to the broker and cancel but all the phone lines are engaged. Maybe you were in the trade @ $5 a pip with a 20 pip stop/$100 loss. Now you finally get out 80 pips above and you have lost $400.
This is why I never trade NFP and recommend you to avoid it too. There are far easier, more predictable & less stressful trades out there and these are the ones I look for every day.
The Forex Week Ahead
So where does it leave us now? I said the other week that the $ looked as though it was going to turn. This was from analysis that I did on the weekly & monthly charts.
The last 2 weeks it looked as though I had screwed up again (remember what I told you about listening to “experts” 
BUT weekly & monthly trends do take plenty of time to reverse.
Last November at the end of 3 or 4 months of major falls with the start of the world financial meltdown, price on the Euro/$ started to move sideways before slowly rolling over. In December this rolling over resulted in a 2000 pip move up.
If you take a look at the same pair on the current daily chart we have a very similar situation unfolding, but obviously in the opposite direction. So is it going to fall? I do not know, but that 200ema certainly looks tempting as a target!
What I can say with all certainty is that we are NOW at THE make your mind up point on lots of pairs. Price on lots of them has pulled back to daily trend lines/major emas. The 55ema on this pair for example has not broken since April and price hit it to the pip and bounced off. This was also 61.8% daily fib of recent moves. There is a similar situation on the Chf & Aud and the Nzd is still bouncing around its 55ema. What we need to do is watch carefully for the next few days.
Tomorrow I would recommend that you do not trade the market open on any of my systems nor the LMT.
This is the 1st opportunity that the Asian traders have to assess the NFP news and they have had all week-end to think about this. We have had a lot of gaps at recent market opens. I suspect that tomorrow that trend will continue. These gaps could be large and due to the extarordinary Nfp figures these could well be gaps that do not fill. So I would avoid “gap trades” as well.
Personally I will wait for the London open. The over night moves may well be large in the Asian session therefore I am not expecting any M1 trades tomorrow.
Euro/$: If you are trading off the daily charts then options are:
a) is that price will continue to bounce between 1.4800 & 1.5140.
b) short and big move down seems more likely, but hey this is forex- WAIT & SEE. Fundamentally one would think that price will fall. The President of the ECB announced on thursday that the Euro looked to be pulling out of recession and technically there is a 5/8 cross forming on the weekly chart and stochastics are pointing down. A break and close through the 55ema and 1.4800 would give us possible shorts for later in the week. If it does break out down we could have a possible 500 pip move to the daily 200ema
If you trade off 4 hour charts then price has already broken the 200ema and a pullback to 1.4900/20 would be a good area to look for further clues for a short: fibs, emas etc. The last few weeks the bollinger bands have given huge clues as to whether price is going to break an area. Watch the daily bollingers on all pairs at the market open. If they stay closed then a bounce will be more likely. If they swing open in a downwards direction then price is likely to fall.
If you would like equally detailed analysis (daily) on the other 10 pairs that we trade then consider joining our low cost forex mentoring service
Summary: My recommendation is that you definately leave the market open alone. If you are going to trade wait until London has opened. There is a lot of news so make sure you check your calendars and do not place trades within at least an hour of a major news release. There are also more of those dreaded speeches again, remember how trichet spiked the price of the Euro/$ on Thursday? Well both he and Bernanke are giving speeches tomorrow as well as some minor players. Be very careful. If Bernanke makes much reference to NFP we could be on for another roller coaster ride. Remember the mantra: IF IN DOUBT: STAY OUT! Have a great week, regards, Marc
if you would like to see the video full screen click on the “you tube” icon right hand corner. PLEASE leave a comment/Rating on you tube, regards, marc
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