As every first Friday of the month we saw the non-farm payroll data orNFP out of the U.S. which on the headline came in better than expected and therefore plenty of currency charts have been temporarily disrupted which caused a spike in temporary floating losses in anti-USD crosses. Economists had forecasted that the U.S. economy added 165,000 jobs, but the report revealed total additions of 195,000 while theunemployment rate held steady at 7.6%.
Revisions to the prior two months showed an additional gain of 70,000 which further fueled hope at a recovery in the labor market. Those who decided to ignore the headline figure and dig a little bit deeper into the structure of the labor market were able to witness major problems. The number of discouraged workers or those who have part-time employment and seek a full time position surged to 14.3%. When you add this to the unemployment rate of 7.6% you arrive at a total figure of 21.9%.
Another sign of caution is the rise of part-time employments which rose to 28.1 Million. This eventually means that those positions will be eliminated and this will collapse the U.S. labor market which will send the unemployment rate back above double digits. Finally, over 50% of all created jobs are in the low income as well as low quality jobs which will not encourage greater economic activity. We expect the labor market to deteriorate over the course of the second-half of 2013.
Overview of profits for the week which ended July 5th
- CADJPY: 195 pips
- AUDUSD: 75 pips
- USDCHF: 125 pips
Total Profits: 395 pips
Monday, July 1st
AUDNZD Long Recommendation
We recommended a long position at 1.1825 with a take profit level of 1.1925 (AUDNZD Falling Wedge). This pair corrected further and triggered our adjusted stop sell order at 1.1700 and currently this trade carries a floating trading loss of 162 pips. We will maintain our take profit target of 1.1925 for our long position and 1.1650 for our short hedge.
Tuesday, July 2nd
GBPUSD Long Recommendation
We recommended a long position at 1.5200 with a take profit level of 1.5525 (GBPUSD halts at Support). This pair moved lower and we canceled our stop sell order in anticipation of a negative surprise out of the NFP report which did not occur. This currency pair moved lower and we currently carry a floating trading loss of 316 pips. We will seek to add to this trade next week and maintain our take profit target of 1.5525.
Wednesday, July 3rd
AUDCAD Long Recommendation
We recommended a long position at 0.9550 with a take profit level of 0.9900 (AUDCAD Falling Wedge). This pair moved higher and we carry a floating trading profit of 31 pips. We will maintain our take profit target of 0.9900.
Thursday, July 4th
EURUSD Long Recommendation
We recommended a long position at 1.2925 with a take profit level 1.3175 (EURUSD Pre-NFP). This pair moved lower and we canceled our stop sell order in anticipation of a negative surprise out of the NFP report which did not occur. This currency pair moved lower and we currently carry a floating trading loss of 173 pips. We will seek to add to this trade next week and maintain our take profit target of 1.3175.
Exit from trades of previous weeks
CADJPY Long Position
We closed our open CADJPY long position on July 2nd for a profit of 195 pips as we closed this trade at 94.95.
AUDUSD Hedge
We closed our open AUDUSD hedge on July 3rd for a profit of 75 pips as we closed this position at 0.9075.
USDCHF Hedge
We closed our open USDCHF hedge on July 5th for a profit if 125 pips as we closed this position at 0.9630.
We had a total of four new trading recommendations this week which all remain open and have not created profits yet. Our four trading recommendations form this week carry a floating trading loss of 620pips. We have closed one trade plus two hedges from previous weeks for profits of 395 pips which total our weekly profits and mark a good start for July.
In addition to our four trades from this week we also have eight positions from previous weeks. We have two open USDCHF short positions which currently carry a floating trading loss of 694 pips. This represents an increase of 357 pips compared to last week. We will seek to add one final short position to this trade next week.
We have one open USDCAD short positions which currently carries a floating trading loss of 65 pips. This represents an increase of 63 pips compared to last week. We will maintain our take profit target of 1.0400.
We have four open NZDUSD positions, three long positions and one short hedge, which currently carry a floating trading loss of 928 pips. This represents an increase of 64 pips compared to last week. We will maintain our take profit target of 0.8235.
We have four open EURGBP positions, three short positions and one long hedge, which currently carry a floating trading loss of 1,625 pips. This represents an increase of 203 pips compared to last week. We will maintain our take profit target of 0.8275.
We have three open EURAUD positions, two short positions and one long hedge, which currently carry a floating trading loss of 2,292 pips. This represents a decrease of 62 pips compared to last week. We will maintain our take profit target of 1.3585.
We have three open AUDUSD long positions which currently carry a floating trading loss of 1,604 pips. This represents an increase of 231 pips compared to last week. We will maintain our take profit target of 0.9630.
We have four open AUDJPY positions, three long positions and one short hedge, which currently carry a floating trading loss of 900 pips. This represents a decrease of 190 pips compared to last week. We will maintain our take profit target of 94.00.
We have three open AUDCHF long positions which currently carry a floating trading loss of 1,390 pips. This represents a decrease of 297 pips compared to last week. We will maintain our take profit target of 0.9250.
Our total floating trading loss at the end of the week stood at 10,118 pips and represents a 2013 high which we expect to also represent the peak of our floating trading losses. This represents an increase of 1,109 pips or 12.31% which is also represents an all-time record. This was primarily due to the positive surprise in the NFP data which added to our losses as the USD surged against all major currencies. We expect this move to reverse over the summer.
Losses to related to the AUD accounted for 6,317 pips or 62.43% of all floating trading losses and is down 187 pips or 2.88% compared to last week. USD crosses accounted for 3,780 pips or 37.36% of all floating trading losses. Overall we expect to witness a gradual improvement albeit at a slower pace than desired in out floating trading losses.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities.
