Recap 6/28/04

Well Standard Deviation Day worked on the GBP. I was able to make net +20 pips with +32 from yesterday for a total of +52 for my day. I was actually up +80 pips but I made a few bad trades that did not work late in the day. An upbeat is a good day, at one point I was up for the month. I am still down -30 pips. Tomorrow, I will either be up over or down more than 30 pips.

Tomorrow will be a difficult day to trade. I have a feeling that tonight European currencies will continue its weakness. GBP is particularly oversold. I think GBP will break that 1.8045 level. A break of that level you could see the GBp go to 1.7900 level very easily. Everything seems to have turned negative for the GBP, news on Blair, BOE's King made comments, weak UK confidence #'s, with Strong US Confidence #'s are staging a dollar rally on all currencies. If we see continued strength overnight on the dollar, we might get buy the rumor sell the fact type of reaction, once the Fed makes their decision.

I get the feeling that we will have continued dollar strength even after the announcement, for the reasons I stated in my previous posts. Peoples Pychology will be realized that, wow we raised rates, here goes the beginning of a long cycle of hikes. I could be wrong, but we get this type of reaction, we will see a relief rally overnight, but do not forget the dollar will not let up, cause we have the employment #'s coming out on Friday. Most traders will be concerned going against the dollar, cause if we have good jobs #'s, we will be worried that we might raise rates again very quickly, maybe even talk of 50% basis pts next time. It will be most interesting.