NFP will weigh heavily on markets after last months surprise numbers

Hi

Thursday saw a fantastic winning trade for those that were patient, with the break of the Triangle short, a possible entry and those that waited for the break and retest of the Daily Pivot doing especially well. We should have got a tight stop and a 2-1 return down to 1,2908. Looking back it looks like such an easy trade and yet it really did take some patience and belief to get the entries.

Context

Its NFP on Friday and with last month providing some rogue numbers the market will watch carefully for the last figures before US Presidential elections. We also need to watch for the effects of the ubba storm rolling into the states.

The market is still bouncing around inside a bigger range. In our time frame its up and down enough to offer some opportunity but on a bigger time frame its really stuck. At this stage there is no sign of the expected bailout request coming from Spain. We will still be watching Spanish bond pricing and especially the 10 year bonds closely as borrowing costs push towards unsustainable levels for the Spanish. The 25 % unemployment level is Spain is hard to believe or really comprehend. Its along way back for the EURO. At any time supportive news on the Spanish bailout could spike price otherwise I am expecting a slow probably downwards day.



Technical Analysis
The daily pivot sits below weekly and above monthly and for me this means a slightly bearish flavour, to a mixed outlook. The main level today is once again 1.2908 and as long as we are below it I am bearish.

The Day Ahead –  It’s a Monday morning we need to let the big money come in and provide our direction.
Bias- I think the market will slide down, and then may spike up on Spanish bailout or bond news….
 NO TRADE:  I wont trade between 1.2908 and Weekly pivot.
BEST Short entry; I would like to see price take out Fridays low of 1.2880 and then retest. My target would be monthly pivot after that I will stay out as price will have reached extension from the daily pivot.

BEST Long Entry; There is a long way to go for me to be long today, we would need a beak of WP, and then a pullback with an entry above, I would target DR1, and possible leave a little on for 1.3033.
Other Entries;

NO RED NEWS Today
If you have any questions you can submit them here or email me at paul@paulbotterill.com

All the best
PBT