Hi all, hope you are all having a good rest this weekend after an enjoyable week on the markets. Time to look back over the week that was and see what happened, what didn't happen, and what might happening in the week ahead. Ok first things first, Live Calls, our best week so far, with a couple of +50 pip trades, really bolstering the numbers, closing the week out at +285 pips, with a around 85% of trades called finishing break even or better, a pleasing week, but of course bound to be an exception rather than the rule. In terms of my personal trades not called live, once again, I finish slightly worse off at +277, although I am still holding a trade over the weekend so that will change, but more importantly it marks the week where our 1000'th pip was gained, now sitting at a balance of +1257 pips .. hoorah!

Enough of the admin stuff, now let's look at what happened during the week. Economic data announcements seemed to be the early focus of the market with two main announcement focused on this week, one from the ECB (E-12 interest rates) and the other from the US (non-farm payroll). If you remember from my theory article on Trading the News that a rise in interest rates should encourage that currency to rise. This is the "text book" theory on this, and usually holds true, but this week we saw the ECB raise rates for the first time in ages, only to see the immediate reaction was to sell off the EUR. So what happened? I have one explanation, but I am sure there is more to it than just this.

The ECB announcement that they will raise rates by 25 was met with mixed reaction immediately after the announcement, with some minor selling on the EUR/USD seen, however 1 hour later, the Euro plunged, selling off quite quickly, so what happened? Quite often more important than the announcement itself, is the speech that goes along with it. Investors and traders look for the sentiment to come out of these speaches, is this a one off raise? are there more to come? what is the outlook? ECB chairman Jean-Claude Trichet, in announcing the raise, gave no indication that more rate rises would follow in is press conference that followed, it was this underlying sentiment that the market reacted to the most, pushing the EUR down 50-90 pips as the EUR weakened.

The second announcement I mentioned, of the US non-farm payroll, I can not explain. First a definition, and I will use the definition from http://www.forexfactory.com: "The indicator reading represents the month over month change in the number of paid employees working part- or full-time. Employment growth will generally strengthen a country's currency, as it is an important indicator of the economy's overall health."


The expectation was for payroll figures to come in at 200K, instead they came in at 215k, above expectations, fantastic right? ... stronger figures, coupled with a lot of positive data during the week, meant I thought it was time to buy the USD and watch the green figures grow. The press conference that followed I took as also being positive, so all was looking good. So what actually happened? The USD weakened hard in the following hour (see above chart in yellow, where the USD weakened sending the GBP up) ... confusing ... then to complicate matters, the following hour saw the US reverse again (above in red, profit taking?), strengthening the USD to return to just about where it started before the announcement, ok all seems right now, but what happened after that? .... it weakened again to approach and finish around daily extremes (blue), all very odd. I personally do not have an explanation, and would love to hear your ideas, so please insert a comment below this post and let us all know why you think it happened.

Ok, now for the upcoming week, I am currently short on the GBP @ 1.7341, with a tight stop loss around 20 pips above it's current level, we will see if that is a good idea. For the site, the overwhelming response to the latest poll "Is video tutorials something you would want to see on Akumulate Pips" was positive (100% in fact), so I will work on something along those lines in the upcoming weeks. A new poll is now available, be sure you place your vote. I have some interesting theory article in mind for this week, time permitting, but if you have something you would like to see, please email me at akuma_me@yahoo.com or add a comment below and I'll do my best to accomodate.

Finally a big thank you to all the readers so far, currently we are at around 100-150 unique readers a day, around 200-300 page loads (and just passed our 10,000 page load since September) with visitors from 23 different countries so far, which only proves the world is getting to be a smaller place. I have big plans in the near future so be sure to spread the word.

Happy trading!

This week's result: +277 pips | Since Sept 8, 2005: +1257 pips

This entry was posted on Sunday, December 04, 2005 at 9:52:00 AM. You can skip to the end and leave a response.