Where Do We Go From Here?

Well, US non-farm payroll numbers where released, the market reacted and now all the traders have retired for the weekend. For the record, US non-farm payroll (NFP) rose by 121,000 in June. A figure I was personally watching this morning, the revision from May (which I thought was low) was revised from 75,000 to 92,000. Also, average hourly earnings increased to 0.5% from 0.1%, which to me reflect employers more willing to pay overtime than take on new employees.

No USD friendly numbers!

So, where do we go from here? I am not an expert on Forex fundamentals. I do, however, recognize the importance of fundamental analysis in maintaining and confirming the long-term technical view of the currency pairs I trade. Can the long awaiting sentiment change in the USD finally be upon us? Before you get comfortable in your range-trading strategies here are a few points to consider for your summer trading.

The Federal Reserve – My favorite people (ha, ha, not!). Will interest rates continue to rise or will Bernanke and crew take their collective foots of the economic breaks?

Economic News – Do the NFP numbers signal a slowing economy and can we expect trade balance to narrow and foreign capital flows into the US slow?

Energy - Will the EU spat with Russia over energy policy have a greater impact on the global economy? Will the North Atlantic hurricane season be as devistating as last year? With another rough season forecast, it is sure to spook investors!

World Politics - Will the geopolitical situation in Iran and now North Korea be another reversal factor? Will Afghanistan's reviving insurgency rival the intensity in Iraq?

I don’t know the answers, but as we progress in the month I am taking a keener interest in the fundamentals. I do declare myself a technical trader. I am looking for chart patterns, wave patterns and am still best friends with Mr. Fibonacci. However, I am learning to appreciate fundamentals more and more to the point where I now incorporate them as an additional confirmation in my trade plan.

Technicals are the rudder of the sail boat, but fundamentals deliver the wind to the sails!!

Happy Trading!!



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