Up Spike Before Jobless Data

What's up with the upspike in the EUR just prior to the jobless data, after which it went all the way down?

Does anyone know what caused it? I couldn't make out with the market jumped up like that just moments prior to the data.

stupid dealer tricks?

Didn't seem to be the case, I was checking the charts on Netdania. EUR went briefly from 1.2072 to 1.2137 before the news broke and it went it's way down.

Bears could have been unwinding some short positions as a hedge against bad numbers. Also could have been a "Bull Trap" -- Bears trick the Bulls by bidding up the market, getting Bulls to go long then switch in the opposite direction.

I think it was a trick. Everyone knew that last month a "special" few somehow got the number early. Maybe they got it early again but wanted even more money so they squeezed it higher to give the impression that the leak indicated poor jobs data. That way not only could they position themselves higher, they'd also see frantic selling to drive down prices even further. I saw some text from MNI that said a lot of people weren't able to sell immediately given the goings on so had to short lower down hence there was no bounce on the euro all day as people that wanted to or needed to sell sold into every 5 or 10 point up move.

that spike is done intentionally by the US banks i believe. they try to get rid of the people trying "straddle" trades where they have an order setup on both sides of the market right before an important announcement. that spike happens often right before important numbers come out.

If that is true, then you have discovered a gold mine. The banks would have to know in advance what the announcement numbers are going to be, otherwise they would not know which direction to send the spike. If the spike was in the post-announcement direction, then it would not BE a spike. So, all you would need to do would be to watch the market a few minutes before the numbers are announced, and put on a position OPPOSITE to the pre-market movement.

hmm...can't they run for stops on both sides? BUT these numbers don't come out of nowhere just in the moment of announcement. However I don't know much about how are these numbers assembled and handled in statistical offices....there might be people who know.... ... (???)

it happens so fast it would be hard to capitalize on. did you see that spike live? the GBP covered over 100 pips in like 3 seconds! you may make money on some straddle trades, but in other instances you loose your shirt. there are guys out there who can make money at it, i personally always got burnt.

if you were watching CNBC (US) a few minutes before 8:30 ET, they noted that Mankiw was to be a guest later that morning and speculated that the number was going to be good -- otherwise, Mankiw would not have been so anxious to pop on tv

bit of a tip off

Kristian Kerr (chief technical strategist at FXCM) offers a opening-range breakout strategy in the June issue of Active Trader -- where you wait for two reverses

and explains the logic:
". . . trade sets up when interbank dealing desks use this intelligence to trigger stops on both sides of the market, resulting in new intraday highs and lows. Once these orders are cleared from the books, the market is primed for its first real directional move of the day. . ."

"stupid" dealer tricks

Hi all, introduction

I go by slick 60. I come from afar from dailyfx forum. Read today the posts about the "upspike" May 7/04 and had to add my 2 cents. Surprised nobody has complained in this segment about their trading platforms being locked during this time. I personally had 4 short and two long positions on in the EUR/USD pairs that were hedged for quite awhile. At 8:29 plus A.M. EST I tried to unwind my 2 longs on the huge 100 pip spike. With FX Solutions my platform was frozen and would not allow any trades to be made. As I see Merlin said it was seconds and believe me it was that. At 8:30am crasholo and now I am not able to take my shorts off (not to bare my butt) to get out of the hedge. My trading platform was locked for an eternity - probably 2 - 3 minutes until markets began sharp retracements. By this time my mind is now in the toilet and I am so teed off when the platform came live I dusted everything off like a fool at that time. Obvioulsy I should have nipped the longs and held the shorts BUT-----
Long story eh! The point is the dealers have your playbook in front of them with everyone in the world to see where all the STOPS are placed. The spike in my mind is nothing more than an unscupulous run on stops to apease the greedy nature of the dealers. THEY ARE A PACK OF THIEVES! They are there for them - NOT YOU. When you do not use stops like me then they freeze the platforms. Sooooo short stops (not baseball players) were run north as far as the eye could see and WHAM out came the numbers. Dealers did not have to pay off on all positions stopped out to the short side and platform freezing prevented any new ones for being put on. A tidy profit indeed for the thieving pack.
BE AWARE! Know that they are this way and make your living away from the crucial announcements OR (me being the dummy that I was) hang in the market and go with the market. Look where we are today. INEXPERIENCE on my part - 1.2140 to 1.1800 would have been REAL GOOD for my 4 short positions now. I paid my dues on this one. Another lesson learned in the forex market university!
Whew, will this guy never finish??? YES. Not only was FX Solutions GTS trading platform frozen I understand that FXCM was also and if one were to check it out probalby the mulitude of the platforms were the same. REFCO when asked by me said they do not suspend trading - don't know about that because they are a subsidiary of FXCM.
In any event life rolls on & I look forward to reading and contributing here if I may. Not all my stuff is this long. It is Saturday!
slick 60

Just checking