Trading Signals and News Update For Wednesday

Earlier today we had a couple of indicators coming out. First, we had a UK trade balance coming out at 4:30 a.m. New York time. It came out a lot worse than it was expected. It hit my trigger to sell GBP/USD, and we expected the GBP/USD going down by 35 pips or more in the first hour of the report. What actually happened was the price opened at around 2.0260, and it went down to about 2.0240 so it was about 20 pips, and the 40 level was a very strong support level. As a result, it just bounced off, and it never came back as it went the other direction. If you made money on this, this is good; if you lost because you expected a bigger move, that's OK - there is going to be another opportunity. I consider it as a failed signal because it did not reach my target level.

Then, at 8:15 a.m. we had housing number coming out of Canada. That did not hit my trigger.

At 8:30 a.m. New York time we had Canadian trade balance coming out. It came out way lower than it was expected. It hit my trigger to buy EUR/CAD, and EUR/CAD opened around 4463 or 65 or so, and then it went up to about 4488. It went up only 20 pips in our direction; we expected around 40 pips. Then it retraced. It did not help that the housing came out a little bit higher, and housing price index also came out higher as the housing is a sensitive material. I will consider this as a failed trade also.


Let's now talk about tomorrow, Wednesday.

1. Wednesday, September 12th, 2007 (4:30 a.m. New York Time) UK
At 4:30 a.m. New York time will have UK average earnings including UK unemployment rate coming out. To be honest, it is very difficult for me to give any triggers for this one because this indicator has always been coming out with other things such as BOE minutes or trade balance, so it is very hard to say how much impact it can cause to the the market. In addition to that, in my opinion, the unemployment rate is the most important indicator out of the three; however, it very rarely deviates from expectations, and average earnings as a very volatile indicator. Therefore, unless you are experienced trader, I suggest you to not trade this one. If you are an experienced trader, than you will know what to do. Basically, all three indicators should be in line, and if they are, then see a price action to make a trading decision.

2. Wednesday, September 12th, 2007 (5:00 p.m. New York Time) NEW ZEALAND
Then at 5 p.m. New York time we will have Interest rate statement coming out of New Zealand. It is expected they will hold the rate at 8.25%. It is extremely unlikely that anything will happen but of course if they will hike the rate to 8.50%, we may see NZD/USD going up by 70 pips or more in the first hour of the report. If for some reason they will cut the rate to 8.00%, NZD/USD may go down 70 pips or more in the first hour of the report. Most likely they will keep the rate at the same level. Pay attention to some comments that may come out together this interest rate statement. If they will give any hints towards future rate hikes, we may see NZD/USD going up by 50 pips or more in the first hour of the report. If they will give a hint towards possibility or need towards rate cuts, then we may see NZD/USD going down by 50 pips or more in the first hour of the report.

3. Wednesday, September 12th, 2007 (6:45 p.m. New York Time) NEW ZEALAND
Then at 6:45 p.m. New York time we will have New Zealand retail sales. I think this is an important indicator. The headline number is going to be the important one. If it reads 0.6% or higher, I think it would be a very pleasant rebound, and we may see NZD/USD going up by 40 pips or more in the first hour of the report. On the other hand, if it comes out at 0% or negative, we may possibly see NZD/USD going down by 40 pips or more in the first hour of the report. We may possibly see a spike of about 30 pips in the first 10 to 15 seconds of the report, then we may see a retracement and a continuation of the price action. I would try to get in within 15 to 20 pips of the pre-release price if my trigger is hit, also depending on how big the the deviation is, and use 15 to 20 pips SL and 20 to 25 pips TP.

SUMMARY:
* Report: NZ Retail Sales headline
* Buy on NZD/USD if the number will be 0.6% or higher
* Sell on NZD/USD if the number will be 0.0% or negative
* If the trigger is hit, expect 40 pips or more in the first hour of the report.


That's all for Wednesday.

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