GMT 14:00 PM USD Consumer Confidence (AUG) 47.9 (forecast) 46.6 (previous month).
This is certainly an important figure in the forex world, as it can very much impact the USD and the carry trade, even instantaneously. Let's take a quick look at last month (chart below), when the numbers came in 2.4 points lower than expected (forecast was 49.0, actual number was 46.6).
As you can see in the above chart, both USD/JPY and EUR/JPY (the ideal carry trade currency pairs) plummetted about 100 pips prior to the release of the consumer confidence numbers, then dropped over 100 pips in the 3 hours following the release.
My EUR/JPY trade, which is still on since last week, has been volatile, but still working for me. Like I mentioned last week, long the EUR/JPY (or short the JPY) is my preferred direction (this is a carry trade), so I'm more willing to ride out the heavy waves of volatility in return for a potential big upswing, and every day that I'm still long the pair, I earn money on the interest-rate differential).
Right now, the momentum cetainly seems to be in my direction and so I have two choices: stay put with my current trade or add to my position. Since I missed a very nice entry point at the 134.20 level, around 2:00am EST, I think my best bet is to stay put and ride out the wave as far as it takes me.
No comments:
Post a Comment