The week came to an end with the same debate we have heard for months now-  is the economy improving (rebounding, recovering) or not? Politicians claim that things are getting better, stocks are advancing, but the unemployment level remains stubbornly high. There is no convincing data pointing either way. Corporate America is largely posting increased earning, yet some claim that the good numbers came from savings realized through earlier cost cutting and layoffs, rather than true recovery.

Today the latest GDP numbers for the US were published. The economy expanded by 2.4% in the second quarter, short of the expected 2.5% as predicted by the economists. However, at the same time the figures for the first quarter were revised up, to 3.7%. This is a huge change from the original 2.7%. Instead of making the picture more clear, today’s report created additional question marks. It seems that at best, the recovery, if ever present, is slowing down now.

Currencies responded to the report by moving against the Dollar. Not really across the board move, but some currencies like the Pound and the Aussie staged decent rallies. Nothing extraordinary, though, daily ranges were not truly elevated. Throughout the day, there were some direction changes, not necessarily the best development for some traders. Like me.

The EUR-CAD trade covered yesterdaywas one example of the less than satisfying results. Following the 51 pips yesterday, this pair broke to the upside, triggering the next buy at 1.3517. Unfortunately, the direction changed and I decided to close the trade for a loss of 72 pips, once it dropped through the latest minor support. Minor, because the next ones should be more important. Basically, the entire 1.33-1.34 band could be a support, with 100 SMA going right through it. That’s why another buy signal will be sought in this area, using candlesticks on 4H chart.

Another trade from last post was in AUD-JPY. Order was filled at 77.60 after which the price rebounded and established a minor high. Normal behavior. Down trend resumed , making a new low, but that’s where it ran out of steam and reversed again. Once the just created minor high was broken, trade was closed for 46 pips loss. No new trades planned here right now, need more price development.

There was a bright spot today, a trade in USD-JPY. The price finally returned to my sell point and produced the targeted 30 pips. I had another trade when the trend turned, with better results, too, but it was taken on another platform and is not included on this chart. Few other orders discussed on these pages over last few days are still valid and will be covered again next week. Have a great weekend!

Mike K.