Interesting move happened this morning and was not expecting it. Core retail sales and retail sales came out lower than expect, however, positive. The key word here is positive. Any data here on out is very important and will cause major disruption, it was proven today by these two numbers. Core retail was 0.1% vs 0.2%, and retail sales was 0.2% vs 0.3%. Although these numbers were slightly off, I guess it was good enough for the dollar to rally hard.
I got burnt really hard yesterday trying to long the dollar. I took that as a hint, the market is dovish on the FOMC rate hike decision. So, today I tried to get in on shorting the dollar. When the data numbers came out lower than expected, I took the initiative to short the dollar. I couldn’t have been more wrong! The markets loved the positive retail numbers and dollar rallied, giving EUR/USD and GBP/USD a huge drop. I was not expecting a rally to come out from this data, but sh!t happens. Lost a good chunk of my capital, however, I took this opportunity to buy the dip on EUR/USD and GBP/USD, and short on USD/JPY. The three pairs are sitting on their support/resistance, and I have a feeling the dollar will drop as it comes closer and closer to Thursday. My only decision now is whether to hold my positions until Thursday. If I strategically place my stop losses and activate a trail stop, the risk is minor compared to the reward it can bring. I’ll be doing a little more research on the possibility of a rate hike to decide. For now, I’m bearish dollar, hopefully this thing tanks.