Yesterday NFP report was released. It was much anticipated by economists and traders alike. And it delivered, only not what one would expected. This was a single most convoluted piece of fundamental news I ever came across. One hand non-farm payrolls declined by 20,000 positions, meaning that employers are still eliminating jobs. At the same time, official unemployment rate declined by rather large 0.7%, falling from 10% to 9.3%. To make it even more interesting, initial claims for unemployment benefits, which was reported a day before, were up, meaning more people applied for them. So, jobs are still crossed off the books, more people get benefits yet official unemployment rate is dropping dramatically. A miracle! Or creative accounting?

To be sure, an explanation to this aberration surfaced, but it was just as eyebrow raising as logic behind the great announcement. Seemingly November numbers contained major error and had to be revised by 60,000. But even this doesn’t add up. If 60,000 equals about the 0.7% improvement, this would mean that total number of unemployed is only about 1 million and we know it is much higher. None of this makes any sense. Either there is some kind of political consideration in making statistics looking better, or people compiling them are incompetent. After all, not that long ago GDP numbers were revised as well, casting a deep shadow of doubt on accuracy and integrity of these figures.

And let’s make it clear that this is important report. I don’t mean just for a handfull of speculators who purchased some half-ass e-book “Trade your way to riches with NFP reports”. These numbers influence policy making, job creation incentives and scores of other issues which eventually effect everybody to some degree. One would hope, no, not hope, expect, that something of this magnitude would be at least clear enough so as not to contradict itself. If anybody makes any sense out of it please let me know.

There was no update yesterday, because I was busy trading. Normally Friday is my short day, I like to start the weekend early. This time around I had many trades trying to play continuation moves after explosive Thursday. As soon as Employment news rule post was published, all currencies went into turbo charged mode. Almost all of the trades discussed earlier this week were closed within an hour or a little more. Turned out to be quite a day.

My torturous trade in AUD-CHF finally came to an and. Price reached my general target are and I got out with 140 pips, just before SNB decided to play God and, supposedly, intervened in the markets. While my exit was a little lucky, market behavior was typical of what happens during sharp sell offs. It would be better seen on hourly chart, but when price starts moving in ever faster fashion, it gives me an impression of a rubber band stretching to the limits and then contracting sharply. That is what happened here, and all JPY pairs, and that was the reason to simply get out. Later SNB rumors happened by pure chance soon after this was closed.

Another one of Aussie trades was in EUR-AUD. Also a difficult trade, taking some time. With Euro having more and more problems of its own, I closed it at the same time for a little over +100 pips. It is short of original objective, but price was not moving as I thought it would, so I’m perfectly happy with this result.

Sell order in CHF-CAD was triggered when on a move out of congestion area, but it was short lived when all Swiss Franc crosses got hammered. Once again, speculation of SNB intervention. I took a 75 pips loss. For now this pair is left alone.

Focus in Kiwi shifted to selling it again, with NZD-JPY featured in previous post. It broke through lower end of the congestion zone. Slow at first, but right after blog was updated things started to move really fast. We have seen it before what happens when JPY gets into one these “moods”, but these exaggerated moves are also prone to a fast “snap” the other way. About 200 pips is what I expected out of this move, but nowhere near as fast as it happened. As a matter of fact take profit order had not been set. Trade was closed “on the run” when it hit 200 pips gain.

Move ended suddenly, price bounced getting close to the middle of preceding large candle. Under some circumstances it acts as a resistance/support. This is an interesting concept and should have its own post, so I’ll leave details out for now. I went short Yen pairs again early on Friday, looking for a retest of the lows from the day before. Here it was at 61.76 and even though I jumped the gun getting out, trade still made 79 pips. Things got a little shaky on NFP news release, but down trade was reestablished fast.

Kiwi-Yen was the first JPY pair to make the move, but other crosses also followed. While writing last update I mentioned price nearing possible support on those chart. One could sell on the breakout, or wait for a bounce and then go short. As soon as blog was updated, price moved lower with some authority. For AUD-JPY that was 79.00. There was no reaction and I found myself “chasing” the price, being late by about 25 pips. But it was worth it and trade brought almost 200 pips in an hour. Follow up trade was taken just like in NZD-JPY, for additional 118 pips. Price formed nice support at 76.20, something to keep in mind for this next week.

Almost identical situation in EUR-JPY. Here my entry was late as well, but the results more than made up for that. Friday trade was good, too. When target for this trade was achieved, I closed the other ones manually. In earlier years, I used to trade these type on moves on both sides, reversing positions. Now I find it too intense and focus on one direction only. At any rate, slow week ended on very good trades, even better than the JPY transactions couple of weeks ago. Hope this keeps up.

Mike K.