The Fundamental FOREX Blog

On Monday 08-31-09 at 9:45 AM ET the USD Chicago Purchasing Manager report for August was released.

This report is released by Kingsbury International, LTD.

On Sunday 08-30-09 I posted a “preview” of this report, click here to check it out.

Here is what transpired with this months report:

USD Chicago Purchasing Manager report for August – stats

Previous = 43.4

Forecast = 47.4

Actual = 50.0

2.6 more than the “forecast” and 6.6 more than the “previous” report.

This was good for the USD and a surprise to the currency traders.

Based upon the results of the last report – I was set up for a trade with the currency pair GBP/JPY – if the “actual” came out 50.0 or higher, I would execute a “buy” order, and a “sell” order if the “actual” came out at 44.0 or lower.

Well, the “actual” did come out at 50.0, and according to my plan, I did execute a “buy” order of the currency pair GBP/JPY – it did not go the way I had predicted, at least not in the order I had thought it should go, here is the chart.

a one minute GBP/JPY chart

#1. After waiting for my broker “spread” and any “slippage” to get back to normal, it looked like this was a good time to enter my trade, but was “stopped” out a minute later.

#2. Here, thinking that the market was going to continue moving down, I executed a “sell” market order and was “stopped” out 3 minutes later.

Based upon past observations, I had decided that if the market appeared to have momentum moving against the ”predictions”, I would “go with the flow”.

This theory has worked many times in the past, but not this time.

#3. Here, it appears that the market was going to move in the “predicted” direction at last, and I would be able to recoup some, if not all, of my losses, but again, as fate would have it, I was “stopped” out 3 minutes later.

By this time I had taken enough abuse from the market and discontinued my “gambling” way.

#4. As you can see here, the market finally did move in the direction I thought it should! Over the next 6 minutes it moved up about 46 PIPS.

The currency cross EUR/JPY moved in similar fashion.

a one minute EUR/JPY chart

#1. After 17 minutes of indecision, the market moved up about 46 PIPS in 27 minutes.

The USD  involved currency pairs that I monitor either did little or nothing or moved in an “unpredicted” way.

The next scheduled release of this report will be on Wednesday, 09-30-09 at 9:45 AM ET.

I will probably write a “preview” post a day or two before..

Stay tuned!