Boris and Kathy's FX Blog www.bktraderfx.com
10/06/2006
Today's email alerts:
Alert #2 Buying GBP/USD on Knee Jerk NFP Reaction
The dollar has become grossly overbought on what certainly appears to be less than stellar NFP results. Granted prior months reading was revised sharply higher but wage growth remains anemic and this months data of just 51K new jobs hardly demonstrates robustness.
With momentum funds having now driven weak dollar shorts out of the market we think that further dollar buying may be over for now, as there is really very little fundamental reason to be bullish the greenback. Thus without additional reasons to pursue this rally we think the move may retrace. We'd like to take advantage of that idea by getting long GBP/USD at 1.8710 or better with a stop on the whole position at 1.8660 Our Target 1 is 1.8745 Our Target 2 is 1.8790 As always move the stop to breakeven once T1 is achieved.
Alert # 1 Payroll Payoff
Anyone who followed our soft recs on shorting USD/CAD and long EUR/GBP should have taken something off the table and now gone to break-even ahead of the event risk for the day.
Now on to the NFPs - unless we print wildly over or under 100K the number that will truly matter will be wages. Why wages? Because at 4.7% unemployment we have enough jobs but we need mo' money for the US consumer to spend this Xmas because the house ATM game is long long gone. So now wage growth becomes key to the dollar bullish case. Let wait and see what they deliver.
Alert #2 Buying GBP/USD on Knee Jerk NFP Reaction
The dollar has become grossly overbought on what certainly appears to be less than stellar NFP results. Granted prior months reading was revised sharply higher but wage growth remains anemic and this months data of just 51K new jobs hardly demonstrates robustness.
With momentum funds having now driven weak dollar shorts out of the market we think that further dollar buying may be over for now, as there is really very little fundamental reason to be bullish the greenback. Thus without additional reasons to pursue this rally we think the move may retrace. We'd like to take advantage of that idea by getting long GBP/USD at 1.8710 or better with a stop on the whole position at 1.8660 Our Target 1 is 1.8745 Our Target 2 is 1.8790 As always move the stop to breakeven once T1 is achieved.
Alert # 1 Payroll Payoff
Anyone who followed our soft recs on shorting USD/CAD and long EUR/GBP should have taken something off the table and now gone to break-even ahead of the event risk for the day.
Now on to the NFPs - unless we print wildly over or under 100K the number that will truly matter will be wages. Why wages? Because at 4.7% unemployment we have enough jobs but we need mo' money for the US consumer to spend this Xmas because the house ATM game is long long gone. So now wage growth becomes key to the dollar bullish case. Let wait and see what they deliver.
posted by BKTrader # 10/06/2006 05:41:00 PM 
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