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A light news week could increase the emphasis on the unexpected

by John Jagerson

A look at the week ahead...

Traders are still going to get plenty of inflation data this week but other than that things look pretty light. With the risk environment in the state that it is in, unexpected news, particularly from banks, will be much more important.

Much of the most important news is loaded towards the end of the week with interest rates for the CHF, consumer inflation and sentiment for the USD and trade data for the USD and CAD. This means we should keep our analysis open for now. A continuation of Friday's strengthening USD could be reversed at support levels if the news is bad for North America.

To listen to the podcast, click here: http://www.pfxglobal.com/content/blogcategory/75/186/

Big Whipsaw

NFP conflicting numbers

If any of u were trading this friday feb 2 at around 8:30 to 9:30 est, you would have missed a wicked volatile movement on all USD pairs. Market traders were anticipating this months employment data more than anything else as they want to know if the fed would be thinking of tightening or increasing interest rates.

This months number was 111K and the previous month was revised from 167 to 206k.

so the report was bad for the for the dollar but revisions was good. When the first number came out (111k) the market price for EUR/USD and GBP surged up about 45 pips. at this time the revisions were setting into effect and the move to 100+ pips was not manifesting. it stayed there for about 5 minutes before the big guys say to themselves: " hey, this thing aint moving no more so we better exit." The market dipped. The price returned to its original value before the report. At that time i notice alot of 20 Mill+ offers coming in and disappearing around that price. I'm not saying i'm sure about this but it looked like a major play was either liquidating a position or going short on the GBPUSD. He used small 20mills because bigger orders may slip or work against him. THe GBPUSD then gave a wicked Sell 50 pips downwards and returned 30 or so up after that movement. So it was a double whipsaw on the GBP, three major movements. The EURUSD however just whiped once as it moved up to 40 then dipped down 80 pips and then to a further 20 pips closing off at 1.2964. I personally gained only 16 pips from this report which i'm grateful for

Yesterday's Report

yesterday i noticed 2 billion dollars offer on eurjpy right @ the resistance of 157.99. I immediately thought to myself that in order for those position to be liquidated they might have trouble getting filled. at if they become impatient they might lower the offer. Knowing that it is a resistance I waited until the price was 157.98 then i shorted. I came out positive 6 pips right there and later 34 pips on my MT4 account.

It is about supply and demand. That order wanted alot for his offer of euros but the supply was just not available. bids were below his price so they lower the offer to those bids. Hence, the price fell a small bit