After weeks of being on the defensive, US dollar registered a very strong day on Friday. It rose sharply against all other currencies. Reason for this is rather counterintuitive - US unemployment hitting new 25 years high. Employers reported cutting 345,000 jobs, bringing the official unemployment rate up to 9.4 percent in May. This figure is believed to be misleading and by some accounts it could be as high as 16 percent. Now the interesting part. With unemployment climbing all the time, will foreclosures follow? If they do, it will be a serious blow to any talk about recovery, with world wide repercussions. After all, it is US housing market that started this crisis. Some maintain that foreclosure rate in America will determine the length and severity of recession. Any spike in foreclosure numbers could make investors once again seek perceived safety in US Dollar, reversing recent trend.
Rise in foreclosures or not, we expect currency markets to remain volatile. Most of the pairs have changed behavior in early June, comparing to May. This has brought on improvement in the results of our systems, with both of them showing good gains. Please see the results before and follow the link for details.
(Sunday 06.07.2009)
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Here are the results for last week:
- Daily Pound made 111 pips ;
- Daily Euro gained 382 pips;
Follow the link on the right to view details.
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Last week's results.
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Last week we took a look at EUR-JPY. This pair appeared to be ready for a correction, following huge recent gains. That was not happen. Our sell order was initiated but price turned around swiftly and moved up. We registered 101 pips loss on this trade.
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Currency markets are very volatile to economic announcement, especially USD pairs, as we could see on Friday, during unemployment number release. The Dollar has been under serious pressure for a few weeks now, and it is very possible that a correction to that trend is in order. Especially in relation to currencies which experienced above average gains. The "other dollars" come to mind.
We are considering selling AUD-USD. Looks that price is ready to break, for a while at least. Sell order was placed at 0.7875, targeting 0.7750 or 125 pips.
We wish everybody great trading week!
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Once again we must stress that the trades highlighted here are only a small sample of our trades. If you have any comments or would like to obtain more information please contact us at info@spectrumforex.com .
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Risk disclaimer:
Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.
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