Monthly Report: June 2008

For the month ended 30 June 2008:

Profit (pip): +499
Loss (pip): -149
Net Profit (pip): +350

Monthly performance regarding used leverage: +16.5%

Raising capital; Taking time off

I am going to raise capital. It takes time and I have no plan for any trade this week.

Weekly Report

For the week ended 28 Jun 2008:

Profit (pip) +95
Loss (pip): -25
Net profit (pip): +70

Weekly performance regarding leverage: +5.5%
Monthly performance regarding leverage (JUN): +16.5%

Oil passes 140 $/b; Experiencing a change in sentiment

Comments from Libya oil minister on possibility of 170 $/b in summer affected almost everything today. A generally weak dollar, possibility of raising interest rate in Europe as soon as July, and political dispute between US and some OPEC members have been mentioned as the reasons. Oil passed 140 $/b in New York for the first time, dollar depreciated against almost all majors, and more importantly the US equity indexes plunged about 3 percent in the worst June since the Great Depression.

The question to me is that whether conditions have started to change fundamentally and gradually or it is just a more psychological reaction to a daily comment; is it possible to see GBPUSD at 2.000 again or the current 1.9890 is the best time for selling sterling?

I think it may be right to expect that a relatively more stability in oil and other commodity markets is needed to ensure that day to day calculations are based on a solid ground.

6 % profit thanks to flexibility

German Import Price Index rose 2.6 percent in May; about 0.9 percent more than estimate. The first reaction on Euro was negative though it might be for profit taking. However it had a fast and limited impact on sterling when I decided to close my position (selling GBPUSD) in just 25 pip profit.

I didn’t aware of MPC testimony at the Treasury Committee today. The Business Investment was due to release at 04:30 (EDT) and it was when I saw the impact of MPC members words on sterling which reached to the daily resistance at 1.9796.
I had a Sell Limit order at 1.9785 which is activated automatically. I decided to benefit more from the technical condition and I tripled the size but with a 25 pip target which resulted in profit very soon.

One hour later the first position closed at 1.9820 in 35 pip loss. Although I was wrong on my assessment but I was able to benefit from flexibility; this is why I want to increase the capital in coming days.

Selling GBPUSD Ahead of US GDP

About 3 hours after FOMC meeting I think it has been mostly priced in the market. I decided to buy dollar against British pound at 1.9745 and increase the size if technical data become more supportive.

(The Blogger was inaccessible at the time and this post has been added later)

FOMC Statement and Market Reactions

FOMC decided to keep rate unchanged, in line with expectation. It is some highlights from the Bloomberg:

• "Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased"
• "The Committee expects inflation to moderate later this year and next year"
• "However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."
• Dallas Fed President Richard Fisher dissented from today's decision, preferring an increase. He dissented against the rate cut at the April meeting.

Some analysts see this statement relatively balanced. I still think the dollar buyers could outnumber the sellers from now regarding the increased possibility of raising interest rate. There are also some supportive data in the short term; GDP is to be released tomorrow which is expected to be revised higher. At the same time the economic weakness in some other countries such as New Zealand and Britain could be more pronounced from upcoming data.

(The Blogger was inaccessible at the time and this post has been added later)

25 pip loss, but from a small position

The position (buying EURUSD) closed at 1.5545 in 25 pip loss. I wanted to close it before ECB's Trichet speech (at 10:30 CET) but I came too late. The next play would be probably after FOMC meeting.

Reducing the size when there are no supportive data

I closed the selling USDJPY position without profit or loss, because technical conditions are not as supportive as I want to see. There are also some reports that the Japanese investors may invest their summer bounce to buy higher yielding assets overseas which could increase the yen supply generally.

Buying EURUSD; Opening another front

I decided to go long on Euro against dollar, buying EURUSD at 1.5570 when the pair hit its 14H moving average, based on the same reasons mentioned before.

Selling Dollar; Taking position ahead of FOMC Rate Decision

Consumer confidence, housing and manufacturing data all came weaker than expected. US stocks are in green territory now, betting on that Fed is not in a position to raise rate at least now.

I still think that there are more dollar sellers before tomorrow FOMC minutes. Durable Goods Orders and US Existing Home Sales both are due to release tomorrow, both are expected to add more concerns about the economy, making it even easier to sell dollar.

I have started to make my position. Selling USDJPY looks technically an option. I sold it at 107.84. However the best option seems to be EURUSD knowing that German CPI is ahead but I wait until technical data improve in coming hours.

30 pip profit from less profitable side of portfolio

I had another position, selling USDJPY at 108.15, which I opened earlier this morning. The technical condition was very great and I was a too conservative when I reduced the size later. However totally 30 pip profit made at 107.85 and as always I closed positions before US data. It was less profitable than having EURUSD which I closed it earlier.

When flexibility matters

I closed my position (buy EURUSD) in 10 pip profit, just before German GfK. As the chart shows even a weaker than expected GfK was unable stop Euro rising. Reducing the size was the best decision but I have not that flexibility. I am going to increase my capital to let me have more effective control over my positions. (the trade plan)

Buying EURUSD; Starting to price FOMC Rate Decision

Upcoming data from US housing market, manufacturing, and consumer confidence are all expected to reinforce concerns and make it easier to expect the Fed to delay raising interest rate.
In about one hour to the market close, technical data suggest that the recent negative impact from German IFO on Euro has started to fade. So I decided to buy EURUSD at 1.5516, and I might increase the size if I find more supportive facts.

30 pip profit even without oil

I closed the position, taking 30 pip profit in 8 hours, well before releasing Euro data. There is much room for Euro to depreciate today but the risk has started to rise technically and I don't want to bear it. Oil price reached 136.55 in Asian markets, near Friday's high, seems ignoring Jeddah summit. (the trade plan)

Jeddah Summit, Euro PMI, German IFO; Betting on the limits

Some OPEC members showed willingness for limiting oil price, at least in their words, which could work in the short term, and selling oil is usually dollar positive. This Monday might is not a promising day for Euro when Purchasing Manager Index for France, Germany, and Euro-zone, in addition to German IFO Business Climate all are expected to show weakness in euro area. Anybody who wants to buy Euro may find it at a cheaper price in the next 10 hours.

So, I decided to sell EURUSD at 1.5634, when technical data looks relatively supportive.

Weekly outlook: 22-27 June 2008

Two factors could affect the currency market this week:

• Jeddah summit and its possible effects on the oil market
• FOMC rate decision on Wednesday

Jeddah summit: I am not even sure whether it could affect the market at all, but I think if there is anything in the summit, which might be invisible to me, its impact would be significant. The possibility of a 2 percent increase in production from Saudi Arabia has been in the news headlines at least for a week and it is unlikely to surprise anyone. The summit was divided on almost all issues such as the reasons behind the jump in oil price or the need to increase the production.

FOMC rate decision: It is almost certain that the Fed will keep rate unchanged this week, but how a certain event could affect the market. In Fact I see the Wednesday more important itself than the FOMC meeting! Because I think it is the day which separates two different participants in the market; dollar sellers and dollar buyers. But how:

1. Dollar sellers: Until Wednesday there would be sufficient data from Euro-zone and US to convince anyone who believes that the possibility of a wider interest rate differential makes sense to buy EURUSD.
2. Dollar buyers: Everyone who believes that the Fed will ultimately raise interest rate would find Wednesday a good time to buy dollar.

However it is a general view and doesn't dictate any specific trade or decision. For example, a depreciation of Euro before Wednesday could be an opportunity for buying Euro but it is unlikely to be bear trend.

Finally, I think just a significant deviation from actual economic data and market estimates could change this general view and minor difference could be ignored.

Calendar Highlights: 22 – 27 June 2008

Calendar Highlights: 22 – 27 June 2008

SUN 22 JUN:
1900 GBP Rightmove House Prices

MON 23 JUN:
0300 EUR French PMI
0330 EUR German PMI
0400 EUR Euro Zone PMI
0400 EUR German IFO Business Climate

TUE 24 JUN:
0210 EUR German GfK Consumer Confidence
0430 GBP BBA Loans for House Purchase
0900 USD S&P/CaseShiller Home Price Index
1000 USD House Price Index
1000 USD Consumer Confidence
1000 USD Richmond Fed Manufacturing Index
1130 USD Treasury's Ryan speaks in London about Financial Markets

WED 25 JUN:
0?00 GBP Nationwide House Prices
0?00 EUR German CPI
0830 USD Durable Goods Orders
1000 USD New Home Sales
1415 USD FOMC Rate Decision

THU 26 JUN:
0200 EUR German Import Price Index
0430 GBP Total Business Investment
0730 USD Fed Kohn speaks at ECB Conference
0830 USD GDP Annualized (Q1 F)
0830 USD Personal Consumption
0900 USD Fed's Bullard speaks at ECB Conference
1000 USD Existing Home Sales
1845 NZD GDP (Q1)
1845 NZD Trade Balance
1930 JPY Jobless Rate
1930 JPY Household Spending
1930 JPY National CPI
1950 JPY Industrial Production
1950 JPY Large Retailers' Sales
2359 JPY Vehicle Production

FRI 27 JUN:
0245 EUR French Producer Prices
0250 EUR French GDP
0400 EUR Euro-zone Current Account
0430 GBP GDP (Q1 F)
0430 GBP Current Account
0500 EUR Euro-zone Consumer Confidence
0830 USD Personal Income
0830 USD Personal Spending
0830 USD Personal Consumption Expenditure Core
1000 USD University of Michigan Consumer Sentiment

All times EDT
Source: dailyfx.com/calendar

Weekly Report

For the week ended 21 Jun 2008:

Profit (pip) +136
Loss (pip): -50
Net profit (pip): +86

Weekly performance regarding leverage: -15%
Monthly performance regarding leverage (JUN): +11%

32 pip profit from a revived victim!

German Producer Prices rose 1.0 percent, 0.1 more than estimates. I closed the position (buy EURUSD) at 1.5528, about 15 minutes before the release; taking 32 pip profit which most of it created in the last 15 minutes. (the plan of trade)

Buying EURUSD; Betting on a Victim

• Euro was a victim of a better than expected Retail Sales in UK, which was highest in almost two decades. Before that, Swiss National Bank cast shadow on possibility of interest rate rise in Switzerland as well as euro area, caused that demand for sterling increased so fast that makes liquidity problem in pound crosses, especially for GBPCHF and EURGBP, which finally translated in selling Euro against dollar.


• In addition, China announced that it is going to raise the price of gasoline, makes the oil price to drop more than 4 dollar; and it was not only another hit to euro but also the reason behind recent rise in US indexes.
  
• Today data from US was mixed. Philly Fed. Index dropped more than estimates when leading indicators increased 0.1 percent.


• I think all of them have priced so far and the market would start thinking about tomorrow German Producer Prices, which is expected to reinforce concerns on inflationary pressures in ECB's calculations.

In less than 30 minutes to the market close, I decided to buy EURUSD at 1.5496; as always I would increase the size if I see improvement in technical data.

Pound and tomorrow Retail Sales; How, When, What?

US indexes fell when dropping profit in financials firms replaced fears of inflation. The story doesn’t end at least for the British pound; Retail Sales is ahead and it is expected to show another decline in May.

How: Minutes of MPC in addition to CPI are sufficient to expect that the market has fully priced recent data and the upcoming data could be seen as a force against the current balance. When consideration of rate rise, as reflected in the BoE minutes, seems unable to support sterling, I think that another decrease in Retail Sales is just likely to add more concerns.

What: So, if the profit is in selling pound then the problem is to find something to buy. Morgan Stanley's today report just revived concerns on continuation of credit crunch, shaked market sentiment, and weakened dollar position; making a scene for buying Yen or Swiss Frank.

When: Swiss national bank is to set the rate in the next 12 hours, and selling GBPCHF would be more easy if technical conditions was somewhat better. Selling GBPJPY is another option; however any decision highly depends on improvement in Technical aspect.

How to change a 90 pip loss to a 2 pip profit!

GBPJPY reached its support at 210.41, almost 90 pip against my position, but I decided to increase the size where I anticipate the risk technically low. I closed both positions, one in profit and other in loss, when the difference converged to zero. Less than 2 hours left to MPC Minutes so I see it too late to hold the position further.

Buying GBPJPY; taking position on BoE Minutes

In less than one hour left to US market close, I decided to buy GBPJPY to have a position on tomorrow MPC Minutes. I think the interest rate differential would work in favor of sterling, at a time when equity markets are struggling to pass inflationary pressures from soaring food and energy prices.

As always, there are some risks to the position. Japan Leading Indicator and BoJ Minutes of Board Meeting are ahead, though I think any effect would be temporary and should it come against my position it could make opportunity for increasing the size.

Regarding not encouraging data from US, buying GBPUSD would be an option especially if improvement takes place in technical aspects.

BoE Minutes; looking for ideas to play

The minutes of Monetary Policy Meeting will release tomorrow which is expected to clarify the latest position of MPC when they decided to keep rate unchanged despite signs of weakness in economy.

I think today jump in CPI could affect expectations from the minutes. I see it mostly in favor of sterling, at least in a short term. There is no doubt that investors don't miss time to reduce their assets in a country which increasing facing high inflation, but the problem is in finding a destination at the time that inflation turned to be a global phenomenon.

German ZEW and USDJPY Response

German ZEW fell more than estimates, but the response from USDJPY looks more interesting to me. I see two possible reasons:

• A general increase in demand for the dollar as a consequence of unwinding Euro
• Positive reaction to falling oil price after depreciation of Euro

Reaction to increase in UK CPI; Story of Trade vs. Gamble

3.3 headline inflation, even more than estimates, was unable to keep British pound from falling. Probably it makes investors more concerned about the prospect of the economy, which is already facing falling home prices and deteriorated consumer confidence.

I was true in taking profit well before the release this morning. It is another case showing why I see it worthless to bet on the data itself, simply because the actual data and the reaction are both subject to high level of uncertainty.

76 pip profit in 5 hours, when recovery matters

Both positions, selling USDJPY and buying GBPUSD, closed in profit automatically, well before the release of UK and US data; making 36 and 40 pip profit respectively.

Buying GBPUSD

I opened a long position on GBPUSD at 1.9633, betting that tomorrow CPI is not fully priced so far!

Housing slump plus Inflation; Going short on US dollar

Housing data is not expected to be encouraging tomorrow, Industrial Production probably stalled after contracting in April, and inflationary pressure in the production side will increase concerns on purchasing power of American consumers.

I think these forces could reduce the possibility of an interest rate rise by the Fed in the short term, which I expect to be negatively reflected in US dollar.

I see two candidates for buying against dollar: British pound and Japanese Yen. I decided to go short on USDJPY at 108.11; regarding relatively good technical conditions. UK CPI is ahead and I would buy GBPUSD (or GBPJPY) if technical conditions improve in coming hours.

No surprise, No money!

Euro zone CPI released and was even more concerning. Although I was true in anticipating its positive impact on Euro, but my loss margin was too tight to tolerate the earlier movements. It is very likely that the relatively large size of the position made me too conservative.

Sharp loss experienced

EURUSD hit the stop loss at 1.5360, making 50 pip loss, but the size of position was three times more than my average trades, so increased the magnitude significantly.

I don't know the actual reason behind the reverse in the market. It might be a comment from an EU official. It happened very fast; considering the time of the event which is about shifting between Asian and European sessions, I guess it might be result of different views in the market.

It is relatively reasonable to expect that the general risk would rise when we move through different sessions. So I could be blamed for underestimating this fact when I decided to increase the size of position that time, but not more.

Another fact might be that I didn't give the market adequate time to reflect any possible effect from the last weekend G-8 summit.

Adding to the position

I decided to increase the size of my position, buying EURUSD, at 1.5410. I have placed a more conservative stop, just below the today low.

26 pip profit in less than 3 hours, When diversification works

I bought EURJPY at 166.80, because dollar had more support and I wanted to give the euro another chance. It worked! The position closed automatically after hitting Take Profit at 166.80, which was 7 pip below the first resistance.

It is more encouraging when I see my other position, EURUSD still struggling to go in profit. However, I still expect it to increase in the next 5 hours, when we get the Euro zone CPI report.

I can remind my last week post; it is why I see the experience so important.

Long on EURUSD

Betting on Euro zone CPI, I have bought EURUSD at 1.5410, targeting first resistance. I would increase the size if technical data improve.

Bullish on Euro

Euro-Zone CPI is ahead and I expect Euro to outperform other currencies, and I see the dollar and the yen as possible candidate for selling in favor of Euro. The reasons:

• CPI is more interesting when the ECB expressed concerns on inflation and clearly said it is going to raise interest rate as soon as the next meeting.


• Lehman Brothers is to report the quarterly results tomorrow which is likely to revive concerns on credit strains and the need holding interest rate low.


• I expect that any positive effect from the last week G-8 summit start to fade as we enter the new week.

Weekly Outlook: Inflation vs. Credit strains

G-8 summit, exploring the possible impact:
Soaring food and energy prices was a common concerns this weekend, both in G-8 Finance Ministers summit in Osaka and World Economic Forum on East Asia in Kuala Lumpur.

As it was expected, the officials expressed their concerns on a weak dollar as an inflating factor. Although such views are usually dollar-positive, but there was some remarks, especially from the US Treasury Secretary Henry Paulson, which could limit any real effect on the dollar. He said: (based on Bloomberg reports)

• "…surging oil costs may postpone a rebound in the American economy, which still faces ``challenges'' from the housing slump and credit crunch".
  Showing different view on the link between dollar and oil price, he said: "All evidence points to differences between supply and demand as the main reason for commodity price gains"
• It is also important to note that there was no official statement on the dollar or any other currency.

OPEC and Customers in Jeddah:
It is said that the Saudi Arabia might announce an increase in oil production, but I am not sure whether it could affect oil price or not. If the answer is yes I expect to see its full effect on Monday.

Quarterly reports from the Financials:
Lehman, Goldman and Morgan Stanley are to report this week. Considering recent disappointing results, I think it could just revive concerns on credit strains, favoring people who don't expect the Fed to raise interest rate soon.

Key Events

I can't see a very significant day in the calendar. Monday with Euro-zone CPI and Tuesday with US PPI and Britain's CPI may be market-moving days.

Bernanke at Senate on Monday might be less impressive regarding heavy speeches in the last week, in a market which probably priced those dollar-supportive words so far.

Also, we would have BoE Minutes on Wednesday, perhaps when the CPI has said everything a day before. However both data, should come in a supportive way, could give a solid ground to the British pound.

Calendar Highlights: Jun 15 – June 20

MON 16-JUN:
05:00 EUR Euro-Zone CPI
08:30 USD Empire Manufacturing
09:00 USD Total Net TIC Flows
10:00 USD Bernanke speaks at Senate
13:00 USD Lacker speaks on Eco. Outlook

TUE 17-JUN:
03:15 CHF Industrial Production
04:30 GBP CPI
05:00 EUR German ZEW survey
08:30 USD Current Account Balance
08:30 USD Housing Starts, Building Permits
08:30 USD PPI
09:15 USD Industrial Production

WED 18-JUN:
04:30 GBP BoE Minutes
11:45 USD Fed's Yellen at Fed's Conference

THU 19-JUN:
03:30 CHF Rate Decision
04:30 GBP Retail Sales
04:30 GBP Public Finance
07:00 CAD CPI, BoC CPI
08:30 USD Jobless Claims
10:00 USD Philly Fed
10:00 USD Leading Indicators
14:30 USD Kohn Testify at Senate

FRI 20-JUN:
02:00 EUR German Producer Prices
02:45 EUR French Wages

Weekly Report: 135 pip net profit

For the week ended June 15:

Profit (pip): +201
Loss (pip): -66
Net profit (pip): +135

Performance regarding leverage: +16.4%

Inflation vs. Risk, how it can affect carry trading

Although the shadow of inflation increasingly cast itself on equity markets around the world, but it seems there is very limited impact on carry trading. It is relatively different to what it used to be six month ago. At that time it was the high level of risk-aversion, affecting both equity markets and carry trading in the same direction. But at this time, inflation is the main driving force, which in one hand negatively affects the stock markets, and in other hand increases the possibility of higher levels in interest rates globally.

When data lose their strength

Increase in New Zealand retail sales was too weak to support the kiwi last night. Also strong inflationary signs in German CPI had nothing for the euro. The reason might be that any support for the currency from high level of interest rates has been offset by the possibility of its negative effects on the economy. USDJPY is also higher, so I think I was true in closing my positions this morning.

Closing the positions when uncertainty increase, Taking 19 pip profit

I closed the positions, EURUSD and USDJPY, taking totally just 19 pip. There are reasons that increase uncertainty significantly:

• G-8 summit and the possibility of discussion on dollar weakness and currency intervention, at least in the words
• Bank of Japan will release its monthly report in less than one hour which is not expected to be positive for the Yen
• Although the US CPI and any other inflationary signs are generally negative to the stock market, but it makes people more convinced that the Fed will raise interest rate sooner.

Buying Yen and Euro, Betting on inflation

Half an hour is left to the US market close; I decided to bet on negative effects from inflation. 10 hours left to the German CPI and I am long on EURUSD at 1.5422. I have sold USDJPY at 107.88; I see the today high as the full price of recent rise in US Advanced Retail Sales.

Technically there is MACD divergence in both charts.

Global inflation in G-8, Local CPIs in calendar

Germany CPI is ahead, always supportive for the euro, but the G-8 finance ministers summit, which is scheduled this weekend, makes it difficult to comfortably selling dollar; Inflation is the main concern and it is likely to be some comments in favor of a stronger dollar. US CPI is also scheduled tomorrow.

Inflation fear can negatively affect sentiment in global stock markets, and this is what I have no doubt about it. Generally it is in favor of Yen and Swiss frank, the two main sources of carry trading.

Taking 54 pip profit, when they are in a hurry

I decided to close my position, short on GBPUSD, taking 54 pip profit at 1.9580. About 8 hours is left until the US advanced retail sale release and I don't want to give time to this market to change its mind! However there is also another reason, the data could improve market sentiment and high yielding currencies usually benefit from that. I am thinking about tomorrow data, inflation in US and Germany, so this sooner than expected profit is a great chance to have more sleep and less stress.

Going short on GBPUSD

One position has opened just now, selling GBPUSD at 1.9634; the size of the position would increase automatically if the rate reaches the resistances.

Dollar-supportive data are in horizon

According to the estimates, US advanced retail sales on Thursday in addition to US CPI data on Friday can be act as supportive data for the dollar. British pound is the weakest competitor in my view, so I will go short on GBPUSD very soon and I will increase the size if I find the coming technical data more supportive.

Increase in retail sales, which is expected to be reflected in tomorrow report, can improve the currently battered market sentiment. So, selling the Yen is an option in the next 20 hours.

UK' weakness might be lost in oil

Unemployment increased, TB deficit widened, GDP estimate come lower, average earnings missed estimates. It should not improve the outlook for the UK economy, but when you look at GBPUSD, which is 0.4% higher, it seems that a stronger factor works against the dollar. Today 6$ jump in oil price may be responsible, which also eroded the Wall Street confidence.

US Retail Sales, Germany CPI, Idea for the game

US advanced retail sales is to be released on Thursday, should it come as a support for the greenback it could arrange the scene for playing the Germany CPI on Friday.

EURUSD & EURJPY, better and the best

Betting on the French CPI, I take profit from EURUSD, but it could be tripled if I had EURJPY instead. Yen was generally weaker today when the dollar had found support from the officials' speeches.

Taking 30 pip profit in 90 minutes

EURUSD closed at 1.5494 automatically just 2 minutes before the French CPI report, making 30 pip profit. The CPI show 0.5 % increase in May, 0.1 more than expected. As always, I didn't bet on the data itself but on its primary effects on the market's sentiment.

Euro instead of GBP

French CPI is ahead and it is expected to show a higher level. I decided to bet on Euro instead of British pound which its last night GDP estimate was disappointing. I am long on EUEUSD at 1.5464, and Stop Loss is placed below the yesterday low, where I think is the full price of Fed hawkish words.

Undecided, even in profit

I closed the position after one hour, taking 13 pips profit, because I am not comfortable enough to hold it. I read three articles in Bloomberg, regarding current sentiment on British pound which I found it too gloomy. However if the technical conditions improve, I am still bullish (in a very short term).

Buying GBPUSD, betting against the words

I think the hawkish tone from the Fed's officials had been the main support for the greenback in recent days but the effect could diminish soon.

Current data from UK are better than expected, especially Industrial Production, or even house prices.

Recent data are not supportive for the dollar. Trade deficit has been widened more than expected.

So I decided to open a long position on GBPUSD at 1.9528. I would increase the size if the technical conditions improve in the coming hours.

BoC rate decision had everything, but profit!

Bank of Canada keeps rate unchanged, concern on inflation is said as the reason. A 0.25 percent rate cut was expected. A better than expected Merchandise Trade was another boost for the currency's appreciation.

Before the announcement, CAD was weaker against some currencies, such as USD, AUD, and NZD.

I think the effects of recent speeches from the US officials made the scene so cloudy that I was unable to detect possible signals from the charts, so I had no position today.

BoC's surprise is a good case showing why I don't want to bet on a data itself.

I study this case carefully. I think many lessons, especially from the technical aspects, can be learned from this cloudy day. I am sure I would use the experience in other cases, as I do it before.

Is the BoC rate decision fully priced?

I am ready to go short on CAD, but technically I can't see any strong supportive data. Canadian dollar has been depreciated last week against almost all majors. So I am going to believe that it has been fully priced, maybe when I was watching TV!

Taking 44 pip profit when I really needed it

Last night I was too tired to post the details of my new trade. The RICS house price balance was to be announced at 19:00 (EDT), and I opened a position to be short on GBP against dollar, at 1.9741, about one hour before the close. I waken up 4 hours later, closing the position at 1.9697 and taking 44 pip profit.

I think my earlier loss has been compensated, so I am going to be more confident when I really need it.

The house price balance was better than expected but the speeches from US officials, from Fed and Treasury, was a boost to the greenback.

66 pip loss, the price of impatience

US pending home sales was well above expectations, I simply underestimate that possibility and its consequences on the Canadian dollar, so I pay the price.

AUDCAD closed in 66 pip loss.

The most frustrating aspect is that I was in 35 pip profit before the report but I understand it after 6 hours.

I am just happy because the size of the position was at the minimum level.

Taking 41 pip profit, Trading vs. Gambling

UK's PPI was more than expected, but I closed my position, long on GBPUSD, at 1.9731, one minute before the release, taking 41 pip profit.

Although the pair hit the resistance at 1.9775 just after the report, but I don’t wanted to bet on the news itself.

In fact, I still believe that any position which is opened based on the expected effect from a data should be closed before the release of that data. I see it as the difference between trading and gambling, because the actual data and the possible reactions simply could be completely different.