EUR/USD profit last week

I mentioned earlier last week that if anything, I was going short on the EUR/USD.  I did and made a healthy profit last week in doing so.  The Forex market was crazy on Friday after the U.S. payroll report showed job growth lower than expected.  Immediately after the announcement, the euro raced up to 1.1992 before traders went back in favor of the dollar.  The pair wound up closing at 1.1822.

Overall for the week, the dollar was up 237 pips versus the euro.  The euro hasn’t been this down versus the dollar since May of 2004 so you have to wonder what next week will bring.

I’m thinking that the possibility that the Fed may raise rates 2 more times early next year is already priced into the market.  I may also be favored towards the euro considering there was a flip from net short to net longs in the CFTC report this week.

Either way, the trend is still in favor of the dollar and therefore I won’t bet against that at this point. 

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