Euro is in a tight range before making a move

As expected eur/usd went down yesterday after ECB chief Mario Draghi started giving a press conference. The move was over 100 pips in over 15 minutes. Impressive! More that type of speeches! Ok, today, if you look at 15 minute chart you will see that the pair is in a very tight range. What does that tell us? That there is going to be a breakout either direction. As we expect the downtrend to continue we are waiting for the low of the range to be broken to enter a short position. Yah, that is a breakout trade and those do not work out that often, but looks like this one will due to the direction and a move up towards the high of the range, which has already occurred during Frankfurt open.

The move will probably occur sometime after London open. On the other hand, we have Non Farm Payrolls (NFP) during US session and as you know these tend to create tremendous volatility across the board. If the move does not materialize by then I will probably remove my short order. On the other hand, smart money can move price down and take profit on the shorts after the release. Anyway, let’s not speculate, but wait for the event and see what happens. 

Effect of Non Farm payrolls last week

Last week Friday Labour market performance surpassed expectations and pushed American stock indices. Standard & Poor's 500 index was the biggest gain in three weeks.

America's largest companies stock price changes locks Standard & Poor's 500 Index last week's trading session came to 1.02%. During the week, the index jumped 1.6%.

Industrial share price changes shows that the Dow Jones Industrial Average index had 0.98% gain. Total purchased and sold about 4.95 billion shares, which was almost a quarter less than the three-month average.

Investors cheered the U.S. Labor Department data showed that in June the U.S. employed 195,000 people, vol. y. far more than analysts had expected. For example, Bloomberg news agency surveyed economists predicted that June will create 165,000 jobs. In May, they created 175,000. True, the unemployment rate remained unchanged at 7.6%.

"Labour market indicators quite strong, while the stock markets are favorable. True, we still have to come to terms with bond yields. We'll see how high it will rise "- Says Matthew platforms, Northern Trust Corp. Share trading guide. The Company manages the investment of approximately 810 billion USD.

Even before the publication of labor market indicators, investors will gladly bought according to the knowledge of Europe. Important news for investors was the European Central Bank President Mario Draghi's words, that interest rates will remain low. According to p. Draghi, key interest rates will be maintained at the same level or even decline as long as necessary. Bank of England manager also suggested that the retention of record-low interest rates.

Investors are in wait for performances of companies. Traditionally, the first public performance of the aluminum giant Alcoa Inc. ' This is going to take place on July 8, after the end of trading day.

Forex news

This is the second post on the topic of Forex. I want to discuss the second best topic on Foreign Exchange market and that is Forex news. This is the driver of most strong market moves that are inspired by fundamental news releases. Most people would advise you against trading fx events and they might be right. Newbie traders get burned when they try to capitalize on Forex volatility and enter the market that is inspired by this or that macroeconomic event. Old and experienced traders know what it is to have an open position and get burned when market turns against you and you are in a loss of thousands of pips.

You can go to any Forex provider, find economic calendar on their page and check what important news events are scheduled for the week. Some of the most famous websites to do that could be dailyfx, Forex factory, investing.com, fxstreet, myfxbook, forexyard or forexpeacearmy. Choose the one you like most, or two and each Sunday check what events are to be released on the coming week.

What are some of the most important Forex news releases? The first would be interest rate decision. Most central banks do it once a month or once in two months. This is the key to fundamental analysis in currency trading. Quite often these are followed by press conferences where central bankers share their view of economy. In most cases these post release events are even more important than the events themselves.

Consumer price index would be second, because it measures inflation in a country and as you know inflation is very much connected to increasing or cutting interest rates.

Producer price index comes next as it directly influence consumer price index and might be a generator of inflation.

Retail sales, although not so important it does create big market moves from time to time. Employment indicators are of high importance as they measure the health of employment sector and of global economy on the whole. Non Farm payrolls should be mentioned separately as it is the biggest driver in employment numbers. By the way, it is coming this Friday.

Other less important, because they create less volatility are: consumer confidence data, durable good orders, beige book and a few more. Some data has no influence to the markets at all.

So, next time you think about opening a trade look at the calendar if there are no economic releases scheduled in the horizon.