Monday, June 14, 2010

Where Do We Go From Here?

Where Do We Go From Here?
Well, US non-farm payroll numbers where released, the market reacted and now
all the traders have retired for the weekend. For the record, US non-farm
payroll (NFP) rose by 121,000 in June. A figure I was personally watching
this morning, the revision from May (which I thought was low) was revised
from 75,000 to 92,000. Also, average hourly earnings increased to 0.5% from
0.1%, which to me reflect employers more willing to pay overtime than take
on new employees.
No USD friendly numbers!

So, where do we go from here? I am not an expert on Forex fundamentals. I
do, however, recognize the importance of fundamental analysis in maintaining
and confirming the long-term technical view of the currency pairs I trade.
Can the long awaiting sentiment change in the USD finally be upon us? Before
you get comfortable in your range-trading strategies here are a few points
to consider for your summer trading.

The Federal Reserve - My favorite people (ha, ha, not!). Will interest rates
continue to rise or will Bernanke and crew take their collective foots of
the economic breaks?

Economic News - Do the NFP numbers signal a slowing economy and can we
expect trade balance to narrow and foreign capital flows into the US slow?

Energy - Will the EU spat with Russia over energy policy have a greater
impact on the global economy? Will the North Atlantic hurricane season be as
devistating as last year? With another rough season forecast, it is sure to
spook investors!

World Politics - Will the geopolitical situation in Iran and now North Korea
be another reversal factor? Will Afghanistan's reviving insurgency rival the
intensity in Iraq?

I don't know the answers, but as we progress in the month I am taking a
keener interest in the fundamentals. I do declare myself a technical trader.
I am looking for chart patterns, wave patterns and am still best friends
with Mr. Fibonacci. However, I am learning to appreciate fundamentals more
and more to the point where I now incorporate them as an additional
confirmation in my trade plan.

Technicals are the rudder of the sail boat, but fundamentals deliver the
wind to the sails!!

Happy Trading!!