13 July 2010, what a strange day for GBPUSD. In the morning session the market basically not moving, but I am busy with my desk job I not find out why. At the afternoon (after 0830 GMT time), there was explosive move upwards. Basically it’s few hundred pips in few large candles. But being caught up with my day job I have no time to investigate it at the exact time. Later I found out that there are a lot of factor I have missed out...
What have I missed out?
I have not followed my trading plan. I should have check the calendar and news before I enter any trade. What happens is in the consolidating period the market waits for the news report. There are few important reports for GBP that day, they are CPI (consumer price index), Core CPI, RPI (Retail Price Index), HPI (House price index). Seems like few of them turns out very positive and attracting buyers on GBP, and thus the huge up move.
In my evening (about 1230 GMT), there are 2 news announcement on the U.S. side, they are Trade Balance, and IBD/TIPP. Seems like both of them doing not well. With this negative result on USD side, this makes GBPUSD rallies higher.
Its several hundreds of pips movement in one day. According fxstreets.com, “The Pound is consolidating important gains against the Dollar as it hovers around 1.5160, 200 pips above daily lows. GBP/USD rallied from 1.4963 to 1.5190 (session high) and erased yesterday's losses. The pair is posting the biggest daily gains since July 1.”
My lesson learned:
- Always check for news before trade
- Always check on the big movement on longer timeframe chart
- Technical analysis wont work by itself, fundamental analysis is important
