December 5th, 2015 Eur Usd whipsaws after NFP-12/4/15 ECB News and NFP doing the 2 step "shake and bake"
Eur Usd pair moved down last month in a 3 step move every 8 days with an average price of 1.0675. Now that most traders were short and hoping for the final push down to parity, the market "mysteriously and without warning" [ :) wink wink ] moved up at the ECB rate hike news release and all the shorts were stopped out and the Market Makers, Banks and a few sharp Retail pros made a killing. That's Forex.
After the 300+ pip move up at ECB rate hike news release the shorts are again setup Thursday afternoon Asia into London Friday morning EST USA prior to Decembers Non Farm Payroll. On Friday after the initial move down at 8:30 am EST USA to get everyone short once again the market went up 80-90 pips (stopping all of the shorts out) then came back down once again getting everyone short and retested 1.0850. All of the traders who went short again on Friday after the NFP report appear to be getting setup for a stop out next week. The big boys like to lock some traders in bad positions over the weekend so they don't have to work so hard on Monday morning after having their coffee. They want to have a base of trapped traders to add to when they start the week. If you ran the show you would do the same thing.
We believe the Eur Usd pair will move higher at some point next week and grind up towards the 1.0980-1.1000 zone.
These fast 80-90 pip stop runs during big news events are very difficult for inexperienced traders to trade. By the time they get "confirmation" from their indicators to finally get in the trade the market is just about to "turn and burn". Once they get up the courage to enter the market stops on a dime and turns and they watch in disbelief as the market accelerates the other way. When they get stopped out (using their "Retail" 20 pip stop) they consider getting in the other way. If they are foolish enough to do so they wait for confirmation and then get in at the high of that move just before (you guessed it) the market stops again and starts to go the other way. By the 2nd or 3rd go round they have had enough adrenaline for 1 day and they exit the market for the week after a decent draw down. Then its back to the drawing board.