What a week it has been on many fronts. Start of the year, very large moves, an avalanche of fundamental data and all kinds of headlines grabbing news. Most telling, perhaps, is the NFP report released few hour ago. The nation’s unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs, capping one of the worst years in modern history for American workers. This is rather serious. On top of that, analysts expect January to be worse, because employers tend to wait with bad news until after the holiday season. Also, a lot of employees are forced into working less hours, or even jobs are converted into part time positions in in order to save costs.
Currencies reacted sharply, with USD getting stronger. Euro lost about 300 pips, although Pound seemed to be holding ground. It is sliding now. And Yen is raising head again. It had been stealthily getting stronger for last few days and today this process accelerated. Which didn’t work well for my daily GBP-JPY trades, however, there is nothing really to complain about.

While I scrambled for few pips, this chart is just awful for a chartist to trade by. Rough day, I think. EUR-JPY on the other hand was much better developed and the slide there presented very good trading opportunity.
Last Saturday in a post “The big picture” I outlined a long trade in GBP-CHF. Premise was to buy it just above last weekly candle and hold it for 2-3 months, with an objective of 1500-1600 pips. The move that came was faster than expected. The following chart is 3H chart, for better viewing.

For some reason this broker doesn’t offer weekly charts, but the high the week before was just above 1.5800. My entry was placed at 1,5830. Once the move started , it didn’t look back. When it hit 1.6900. I pulled the plug for a great profit of almost 1100 pips. Why? Frankly, holding trades for as long as intended is not really my cup of tea. Secondly, since gain was so big so fast, I’d hate see it evaporate now. While I think the up move will continue, there is a good chance we will see a consolidation of some duration. Also, I thought it would be fitting to top a great week with a very good result. This has been an extremely good week for me, catching big moves in targeted crosses. I’ve been getting some emails about it so let me clear something out- results achieved this week were NOT typical and can NOT be expected very often. Normally after periods of above average returns caution is advised. It is very easy to start trading too large and/or getting into too many trades. Gains can evaporate very fast because trader is very full of himself. Happened to me before and more than once.
Tomorrow, I will take another look at both EUR-GBP and GBP-CHF and try to figure out what’s next, but I’m bullish Pound against those two. BTW, trade from yesterday, NZD-CHF, is still pending, for now. Probably will not happen very soon, but I have not cancelled it yet.

Mike K.