Non-Farm Payroll – Trading Forex News GBP/USD 05/08/2011
Friday we had the infamous Non-Farm Payroll, and it came out slightly better than expected. As I mentioned in the forex room before the news came out we will often see the GBP/USD and EUR/USD spike in the opposite direction as they should. He’s why…..for example this month the number was positive and therefore the USD/JPY spiked up nicely. Because of this the GBP/JPY and EUR/JPY spiked up as well. When the GBP/JPY and EUR/JPY spike up that cause instant EURO and Pound strength which is why you now a days often see the GBP/USD and EUR/USD often spike the opposite direction they should. After they spike this direction however they often times follow through the direction they should. Knowing this we took a short position once the spike was well over….in fact 7 minutes after the initial spike. Our short entry was when the market retested the 1.6300 level.
The GBP/USD gave every indication that it was going to move down but simply didn’t see any follow through. We took 20 pips off the first half of the trade and then the other half was closed at break even. Wish we could have taken a bit more from this one but as you can see from the chart there wasn’t a whole lot to get. After that we waited a bit for the next day trading opportunity to present itself.
About an hour later there was a nice shorting opportunity. At point #2 on the chart we had a volume and price based entry that meet our specific criteria for a day trading entry and therefore we took it short. Again we took half of the position off at +20 pips and the other half was again closed at break even. There was a nice long entry that I missed on the GBP/USD unfortunately. The stop loss was a bit wide for my taste (30 pips) and therefore we decided to let it go. Either way it was still another great day in the room and we had 2 very nice day trades. You never go broke taking profit!:) I hope trading went well for everyone and I will see you guys Monday with the next recent trade update!
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