Non Farm Payroll Expected Lower – July 2nd 2015
If The Banks Weren’t Open Tomorrow…
Imagine you wake up and the banks are shut down. Its hard to imagine in the vast majority of the developed world. I have literally preached for years the need to hold PHYSICAL ASSETS. The bottom line is if its paper on a screen then it can be taken away from you. I believe my job at DTFL is not just to teach people how I trade but also to get people thinking about investing from all different angles as successful forex trading is just one form of investing. If your 100% invested in what I term as paper assets then the current world situation should have you asking why. Obviously paper assets such as equities have their place. With that being said people put entirely too much faith is something that can be taken overnight. If your currently in this situation the easiest place to start is without a doubt physical silver and/or gold (I personally favor silver). Start small and buy a little at a time. Remember something such as physical gold and silver are a protection against a worst case scenario. Another words you should be buying with the expectation of selling later at a slightly higher price. You should be buying and holding for the long term as a hedge against a worst case scenario. A good rule of thumb is 5-10% of your net worth in metals. Enough doom and gloom…on to the charts ahead of Non-Farm Payroll.
Euro Slides on Greek Uncertainty
Overall I’m a bit surprised to see the Euro remain so stable. I’m not saying I expected a huge drop in the euro as I think the current situation has been pretty much priced in. What I would have expected more of it volatility in the form of larger price swings. Currently I’m still open to trading either direction on the Euro from the areas listed if we see our entry criteria satisfied once the price gets there. The huge gap down, even bigger retrace, and then slide back to the downside again has left me lacking confidence to mid term Euro direction. As I have warned members many times, I believe the biggest risk is to the downside. Therefore if you are long make sure you are staying on top of the news. Especially if your trading live it would be worth buying a subscription to something like Talking Forex. I believe they only charge around $30 a month for live squawk audio news.
Manufacturing PMI Misses & Pound Tumbles
Manufacturing PMI came out at 51.4 vs. the 52.6 expected number. Overall not a huge miss but it does once again confirm the manufacturing slump in the UK that started to turn back to the downside mid 2014. I will personally be looking for a continued push down today from one of our selected manipulation points should we provide a valid short setup. The 1.5670-80 level is a key line in the sand. Should the market begin to gain traction above this level and the bias to the downside will shift to a potential squeeze up.
Forex News For July 2nd 2015
Construction PMI – Construction PMI is as well in a current slide to the downside. One thing I want people to keep in mind is the overall positioning of smart money that we have been seeing in the COT data. As I mentioned yesterday smart money looks to be closing short positions at a rather rapid rate. Although I still have the bias to the downside today it is important to keep that in mind. Why? Lets assume a scenario real quick. Lets assume Construction PMI is a big miss to the downside. If the market spikes down in the direction of the news and then makes a complete retrace back up and goes through pre-release you may be seeing the end of the current move down. Keep this in mind as news is often used to trap and reverse traders.
Non-Farm Payroll – Obviously the big release for the month is tomorrow. Its coming out a day earlier than normal as Friday is a banking holiday. NFP has been trending to the upside for the last 4 years (If you believe the governments BS numbers). With that being said the current world sentiment is definitely looking less than perfect and it will be interesting to watch this release over the next few months. My best advice is to avoid being in a trade going into any news item that has the ability to spike the market more than 15-20 pips…this is definitely one of those news releases.
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