The takeaway: Be mindful of the information flow …
Banks won this morning at 11:00. I calculated a forward delivery EUR/USD exchange rate of 1.1240 and expected a close at that time of above 1.1200, but the China-US decision to reduce tariff rates for 90 days gave the markets a boost. That boost strengthened demand for the dollar and drove the EUR/USD below, way below 1.1200. The spot (market) price at 11:00 am was 1.1121.
Lesson learned: Watch the candlesticks closely as they may indicate a pending surprise. Also, keep on top of the information flow. Trading is about the exchange of expectations based on the information flow.
What’s going on at the NADEX ….
As of 2:00 pm, Invest.com has the forward rate for this Friday at 1.10825. The NADEX has a contract with a buy price at $8.70 that the EUR/USD will close above 1.0925. The NADEX has another contract with a buy price of $5.70 that the EUR/USD will close above 1.1075. Hedging opportunity?
Alton Drew
12 May 2025
Disclaimer: The above post is not trading advice. Consult a professional before executing any trade. For an assessment of how the legal or regulatory environment is impacting trade, email me at altondrew@altondrew.com to set an appointment.
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