Trading Signals and News Update For Monday

On Thursday we talked about Australian retail sales, and I told you if it comes out at 0.9% or higher, we may possibly see AUS/USD going up by 30 pips or more in the first hour of the report. It actually came out at 0.9, and the price opened at about 8165, and we saw a move of only about 20 pips in the first hour, and then it broke out a couple of hours later for more than 100 pips. According to my signal, my target was not met. Despite of that, I was able to make some profit, and I hope you made too.

Japan CPI (on Thursday) didn't hit my trigger so let's not even talk about it.

Then on Friday we had Canadian GDP which came out higher but it didn't hit my trigger either so that was a no trade.

Then we had Chicago PMI, it came out very close to expectations, and that was no trade as well.

On the Bernanke speech we saw some strengthening on the U.S. dollar, short-term. One of the reasons is because he did not say anything dovish about a rate cut coming up which the market was expecting. I personally did not trade that one; I was just watching.

Let's now talk about Monday, Labor Day weekend, and Tuesday.

1. Monday, September 3rd, 2007 (4:30 a.m. New York Time) UK
On Monday at 4:30 a.m. New York time will have UK manufacturing PMI coming out of UK. It is expected that the UK manufacturing will read about 55 after a reading of 55.7 last month. I personally will not be trading this indicator because first of all it's the Labor Day weekend so we may see some muted action because of that, and second of all, lately we haven't been seeing too much follow through on that indicator. It seems like right nobody really focuses on that. However, if you want to trade, you can try the following triggers: if it comes out at 57 or higher, it think GBP/USD may go up by 30 pips or more in the first hour of the report. On the other hand, if it comes out at 53 or lower, I think GBP/USD may go down by 30 pips or more in the first hour of the report. I'm pretty confident that if these triggers are hit, you will see a move of 30 to 40 pips in the first hour; however, I think such deviation is extremely unlikely so I am not even going to participate that trade; instead, I am going to enjoy Labor Day weekend.

2. Monday, September 3rd, 2007 (9:30 p.m. New York Time) AUSTRALIA
Then, on Monday at 9:30 p.m. New York time we will have Australian GDP coming out. That is a very important indicator, I will probably be trading it. It is expected that GDP q/q will read about 0.6 versus 1.6 last month. This indicator blesses us with its presence only four times a year. If it reads 0.9 or higher, I think AUD/USD may possibly go up by as much as 40 pips or more in the first hour of the report. On the other hand, if it comes out at 0.3 or lower, I think AUD/USD may go down by as much as 40 pips or more in the first hour of the report. I think 30 pips is going to be a very easy target, and 40 pips would be a kind of maximum target for this indicator.

3. Tuesday, September 4th, 2007 (1:45 a.m. New York Time) SWITZERLAND
On Tuesday at 1:45 a.m. New York time we will have Swiss GDP coming out Switzerland. It is expected to read at 0.7%, exactly as last quarter. If it reads 1% or higher, I think USD/CHF may possibly go down by 15 to 20 pips in the first hour of the report. On the other hand, if it comes out at 0.4 or lower, I think USD/CHF may possibly go up 15 to 20 pips in the first hour of the report. That's kind of doggie indicator, it seems people doesn't care about Swiss GDP too much so if you want to trade that, just be very careful. Don't expect much more than 15 to 20 pips of the move, and I would suggest exiting in the first half hour because in my experience it retraces 100% within the first hour after it hits its target of 15 to 20 pips. I will probably skip that one, but if you want to trade it, trade it.

4. Tuesday, September 4th, 2007 (10:00 a.m. New York Time) USA
At 10 a.m. New York time will have ISM manufacturing coming out of the United States. It is expected to read at 53 versus 53.8 last month. I will definitely be trading this one. If it comes out 55 or higher, I think GBP/USD may possibly go down by 40 pips or more in the first hour of the report. On the other hand, if it comes out at 51 or lower, I think GBP/USD may possibly go up by 40 pips or more in the first hour of the report. As always, watch out for important support and resistance price levels.

5. Tuesday, September 4th, 2007 (7:30 p.m. New York Time) AUSTRALIA
Then, at 7:30 p.m. New York time will have Australia releasing its interest rates statement. It is anonymously expected that they will leave it unchanged at 6.50%. If for some reason they decide to hike to 6.75%, I think AUD/USD may possibly gain 80 pips or more in the first hour of the report. However, this is extremely unlikely. It wouldn't be probably a smart move for Australia to do that so quickly so if you want, you may skip this indicator.

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