Friday, September 14, 2007

Trading Signals and News Update For Friday

Earlier today we had Swiss interest rate statement coming out, and I told you that if Switzerland hikes from 2 1/2 percent to 2.75%, we may possibly see GBP/CHF going down by 80 pips or more in the first hour of the report. Well, they did hike, and as you could see, GBP/CHF opened at about 4055, and it went down to about 3940 so it was about 115 pips. It was a relatively slow move. In the first 15 second it went down 20 pips, then another 20 pips, and then another 20 pips and so on.

Yesterday we had New Zealand retail sales. It came out at 0% which was a sell on NZD/USD. The price opened at 7120 and it drop to about 7095 or so. It was 25 pips drop, and then it retraced, and dropped again. I told you that if you miss the spike, you could get in on the retracement. I got in at 7111 and 1/2; however, the price didn't do too much for a while which was very weird for the retail sales. I exited for 2.5 pips loss. To make a long story short, you could have made money if you followed my signal. I did not keep my trade that long.

1. Friday, September 14th, 2007 (8:30 a.m. New York Time) USA
Tomorrow we will have U.S. Retail Sales that I feel is worth watching and possibly trading. This indicator did not have a very good track record lately; however, this particular one, I think, is important because of U.S. situation right now. It is also coming out before the Fed doing something with interest rates, and consumer spending is very important. If retail sales comes out strong, it would be a possibility that Fed may not cut the rate like people are expecting. If it comes out very weak, the Fed may have a good reason to cut a rate even by as much as 0.50%. The most important reading is going to be retail sales core which excludes automobiles, and it is expected to come out at 0.2%. Last month it came out at 0.4%. If retail sales core q/q reads 0.5% or higher, it would be even better reading than last month, and I think we may see some strength in the U.S. dollar so GBP/USD may possibly go down by 40 pips or more in the first hour of the report. On the other hand, if it reads -0.1% or more negative, I think it would be negative for U.S. dollar, and we may possibly see GBP/USD going up by 40 pips or more in the first hour of the report. Please note that it can move the market by as much as 100 pips on GBP/USD pair.

* Report: U.S. Retail Sales Core q/q
* Sell on GBP/USD if the number will be 0.5% or higher
* Buy on GBP/USD if the number will be -0.1% or more negative
* If the trigger is hit, expect 40 pips or more in the first hour of the report.

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