Here we have it. The big, bad unemployment report was announced and it is, well, bad. Official unemployment rate is at 9.7% for August, more than expected. This makes the highest level in 26 years, although to say ”Quarter century low” makes it even more dramatic. Since December 2007 US economy lost a total of 6.9 million jobs, leaving almost 15 million Americans unemployed. Worse still is the so called “underemployment rate”, which reached as high as 16.8 million, the worst since this particular statistic has been introduced in 1994. By the end of the year official unemployment rate is expected to reach 10%. Only thing is left to say is “That much for recovery“.

Response to the report has been mixed. Most active have been Yen pairs, which whipped both ways. Dollar has been a little calmer, but seems to be getting stronger right now. I doubt we will see any huge moves during remnants of this trading day. GBP-CHF was among the most active instruments all day(night), making decent gains. Last hour caused it to move a little higher still. I have been tracking this pair for some time, waiting for a turn around and got in earlier in the week at 1.7263, just above Monday’s high.

I went with this entry, rather than waiting for the bottom on 1H chart to form. Both were outlined in the Follow up post.  That would have made entry at around 1.7300, or so, a day later. Move of about 200 pips was anticipated. That may very well still happen, but I decided to simply close position at the market about 20 minutes ago, at 1.7422, for almost 160 pips reward. Not too bad and now I can start my weekend. Unfortunately, not all of Pound trades turned out to be winners. GBP-AUD buy was a disappointment.

Price has been going down steadily so earlier on trade was axed. Too much exposure to the Pound. Just from the trades mentioned here I still had some long beast holdings, with a few more not covered in the blog. The weakest one was eliminated and that turned out to be GBP-AUD for a loss 76 pips. This reminds me, balance of GBP-JPY trade had reached its objective of 152.00, shortly before the wicked move induced by NFP release. Unlike Pound-Aussie, the beast was good to me all week long with few nice trades. Over all a good, solid week.
Have a great Labor Day weekend!

Mike K.