On Thursday, July 3, the European Central Bank is expected to raise interest rates by 0.25%. That same day, economists expect the U.S. jobs number (”nonfarm payrolls”) to show a 60,000 reduction. Question: How should the two events affect the U.S. dollar’s standing against other currencies? Well, in theory, when a central bank raises interest rates, it makes that country’s assets more attractive to foreign investors. And since the country’s assets are denominated in that country’s currency, it also becomes “more attractive” – i.e. it gains. A weak jobs report speaks for itself. So, come Thursday, the USD should get decimated. Will it? Possibly, but… If you’ve traded forex for a while, you’ve seen many instances when the market would react “illogically” to the news. What’s stopping Thursday from being one of those days? Forex markets often don’t behave as “fundamentals” suggest they should. That’s because what determines the trend ...

It is always amusing to see the end of the day gain or loss in the indexes, and how it sometimes hides the wild action of the day. Today was one of those days - we gapped down (bearish), rallied from what appeared to be a test of support (bullish), gave that all up and tested new lows - 1260 (bearish), and then reversed and rallied to the highs of the day (bullish). For all that action and headache, it just took us back to right near where we closed yesterday. But it scared and/or emboldened traders multiple times, in completely different directions. Absolutely nuts - as they say in bear markets neither bulls nor bears have an easy time making money (the strongest rallies are usually contained within bear markets, but they are sudden and out of the blue).Here is a ...