Gold Breaks $1000 per ounce on Inflation Fear

U.S. Consumer Price Index rose in January, a report on Feb. 20 showed. Gold broke the 1000 dollar per ounce again not just because of inflation but also on rising skepticisms about the future of banking industry. Some news about the possibility of nationalizing of the U.S. banks in the late Friday also made the dollar weakened against its major counterparts.

50 pips Profit from the UK Retail Sales Surprise

I managed to make profit from the U.K. Retail Sales report on Feb 20. A 0.7 percent increase in January surprised the market which expected to see a 0.1 percent decline. I bought GBPJPY in minutes before the report. It was however more a gamble than a usual trade as I hold the position after the report.

147 pips Profit from the BOE Quarterly Inflation Report

On Feb. 11, I mad 147 pips of profit by selling gbpusd ahead of the Bank of England (BOE) Quarterly Inflation Report and may be more importantly the ILO Unemployment report. It was after nearly 5 percent drop in the U.S. equity indexes on rising skepticism about the Treasury's plan for fixing the financial system.

Jobless Claims rose by 73,800 in January, a little better than the estimates, and the unemployment rate climbed to 6.3 percent. Mervyn King, the BOE Governor, painted a very gloomy picture about the state of the U.K. economy in the coming months, saying that the MPC may start buying assets to print money even before the next meeting in March. However, the charts below might show that the news was mostly priced.

Sterling Benefits from the BOE Rate Cut

On Feb. 5, the Bank of England (BOE) cut the bank rate by 50 basis points to record low 1.00 percent. Pound strengthened against dollar, yen, and also the euro. There was a relatively positive sentiment in financial markets as the U.S. lawmakers became closer to pass Obama's stimulus package.

This case, in my view, is a good example showing why both technical and fundamental data are needed to confirm the trader's decisions and any deviation should be seen as an alarm.

Case-study: U.K. PMI (Service)

On Feb.4, the PMI report showed that the service industry continued to contract in January. The figure came better than average estimates.

U.K. Nationwide Consumer Confidence also dropped to record low. I made a small profit from selling gbpjpy before the report and I decided to close it soon after announcement of a new stimulus package from Australia.

Case-study: ADP Employment Change

The chart below shows usdjpy reaction to the ADP employment report on Feb. 4. The report showed huge job losses but a little better than average estimates.