Perfect Risk Trade Scenario
Yet again, the news hardly mattered and the risk trade was by far the most dominant force to move the markets. Today's action is what I dream of....the news went against the risk enviroment trade, the markets briefly moved with the news, setting up a great USD long bet.
Stocks were slightly down...so the USD had gained slightly. Then the EUR news came out as expected, and for some reason...resistance on the chart maybe...the market response was against the USD. So far, so good. Then, 45 minutes later, the US weekly jobs report came in good...should of been good for the USD if you think the news matters...but it responded to the risk trade and the USD weakened some more...stocks should of seen this as positive. And they did, US futures improved. Then, stock futures dropped and the race was on! EU lost 150 pips, AUDUSD lost nearly 200 pips, USDCAD gained 150 pips, USDCHF gained 100 pips, and EVEN the USDJPY gained 60 pips! When was the last time the USDJPY moved 60 pips in a couple of hours???
The fact that the USDJPY moved with the risk...it went DOWN when the 'good' jobs report came out...is significant and every one of you that trade the USDJPY on US news needs to heed this. If this continues, and you are set up to go long on good US news, you will take a huge loss...the USDJPY will do the exact opposite.
Today was one of the best days I've had for some time.