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Forex News Trading – US CPI Short Trade On The GBP/USD 15/04/2011


Overall today we took 3 trades, and ended the day break even unfortunately. The first trade we took was right after the US CPI forex news release this morning. Core CPI came in -.1% worse than expected and then CPI Y/Y came in +.1% better than expected. The most important of the two numbers was the core number and thus why the first initial reaction was USD negative. However after seeing the conflict I knew this would retrace, and that is exactly what it did. We waited for the GBP/USD to move into resistance to see if it would hold and then start back down. After seeing this happen we went short and took +15 pips off this trade.

Additionally there was a GBP/USD short that ended up break even. I should have held onto this trade but after seeing the USD/CHF close below some major short term support I began to not like it quite as much. Based on market correlation, if the USD/CHF is moving down the GBP/USD should move up. Now that is an over simplification of market correlation but seeing the USD/CHF slip through support is what caused the exit.

The final trade was on the EUR/USD. Plain and simple the EUR/USD broke the market correlation that it had been holding all day. Every other pair (GBP/USD and then USD/CHF) moved towards USD strength with the exception of the EUR/USD. This caused us to get closed out for -15 pips, and thus ended the day break even overall.

Overall we had a great week and ended up around +7% for the week. I’m gonna enjoy the weekend and I hope you all do as well. Trading is stressful and it is important to take time away from the charts to relax.


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