Sunday, September 16, 2007

Trading Signals and News Update For Monday and Tuesday

Let's review what happened earlier Friday.

We had only one report that we were talking about yesterday, and that was U.S. Retail Sales. I told you if it comes out negative, we may see GBP/USD possibly going up by 40 pips or more in the first hour of the report. The report did come out negative, and GBP/USD opened up at 2.0130 or so, and then it went out to about 2.0168. It went up about 38 pips or so. There were a lot of opportunities to enter in the first minute or two within a five pips of the prerelease price. Definitely, some money could be made here. Another option was to trade USD/JPY which actually worked much better due to carry trade stuff happening. USD/JPY went from 82 to 35 so we actually saw 47 pips move on that one. I hope you made money on this.

Let's now talk what is going on on Monday and Tuesday next week.

1. Monday, September 17th, 2007 (8:30 a.m. New York Time) USA
On Monday we have only one indicator coming out that is worth mentioning, and that's U.S. Empire Manufacturing indicator. It is expected to read at 20. I said worth mentioning but not necessarily trading. That indicator usually comes out with other indicators so it is extremely difficult to measure how much impact it can alone have to market. Considering the situation with carry trades happening, I recommend to skip that one and just observe it. The really save trigger would be if it comes out at 40 or higher, I think GBP/USD may possibly go down by 30 pips or more in the first hour of the report. If it comes out at 0 or negative, I think GBP/USD may possibly go up by 30 pips or more in the first hour of the report. Such large deviation is extremely unlikely.

SUMMARY:
* Report: U.S. Empire Manufacturing indicator
* Sell on GBP/USD if the number will be 40 or higher
* Buy on GBP/USD if the number will be 0 or negative
* If the trigger is hit, expect 30 pips or more in the first hour of the report.

2. Tuesday, September 18th, 2007 (4:30 a.m. New York Time) UK
On Tuesday we have U.K. CPI coming out. This is definitely steaming hot indicator under current circumstances. The main one to focus one will probably be UK CPI y/y which is expected to read 1.9%. If it comes out at 2.1% or higher, I think GBP/USD may possibly go up by 50 pips or more in the first hour of the report. On the other hand, if it comes out at 1.7% or lower, I think GBP/USD may possibly go down by 50 pips or more in the first hour of the report. We may see a relatively large deviation if it is only 0.1% deviation either direction but in order to trade 0.1% deviation, you would need take into consideration the price action right before the report. I believe that 0.2% deviation is a pretty safe trigger regardless of price action and levels before the report.

SUMMARY:
* Report: U.K. CPI y/y
* Buy on GBP/USD if the number will be 2.1% or higher
* Sell on GBP/USD if the number will be 1.7% or lower
* If the trigger is hit, expect 50 pips or more in the first hour of the report.

3. Tuesday, September 18th, 2007 (5:00 a.m. New York Time) GERMANY, EURO ZONE
Then at 5 am we will have German ZEW. It is expected it will read -17. I think if it reads -30 or more negative, we may possibly see EUR/USD going down by 25 pips in the first hour of the report. If the German ZEW reads -5 or less negative, I think EUR/USD may possibly gain 25 pips or more in the first hour of the report. Spike trading on this one is extremely dangerous. The only way to trade it is get in after the spike, and try to get an entry within 5 pips of the pre-release price, and set a SL maybe 12 to 15 pips, and try to shoot for 15 to 20 pips profit.

SUMMARY:
* Report: German ZEW
* Sell on EUR/USD if the number will be -30 or more negative
* Buy on GBP/USD if the number will be -5 or less negative
* If the trigger is hit, expect 25 pips or more in the first hour of the report.

4. Tuesday, September 18th, 2007 (8:30 a.m. New York Time) USA
Next, we will have U.S. PPI coming out at 8.30 am New York time. The most important one, I think, would be PPI core m/m. It is expected to read at 0.1%. If it reads 0.4% or higher, it would match the highest reading in a while, and I think we may possibly see GBP/USD going down by 30 pips or more in the first hour of the report. On the other hand, if the PPI comes out at -2% or more negative, we may possibly see GBP/USD going up by 30 pips or more in the first hour of the report.

SUMMARY:
* Report: U.S. PPI Core m/m
* Sell on GBP/USD if the number will be 0.4% or higher
* Buy on GBP/USD if the number will be -2% or more negative
* If the trigger is hit, expect 30 pips or more in the first hour of the report.

5. Tuesday, September 18th, 2007 (9:00 a.m. New York Time) USA
I suggest you to skip TIC report at 9 am.

6. Tuesday, September 18th, 2007 (2:15 p.m. New York Time) USA
Then, we will have U.S. Interest Rate decision out of the United States. It is mostly expected that the US will cut the rate by 0.25%. If they cut the rate by 0.50%, I think GBP/USD may possibly go up by 50 pips or more in the first hour of the report. If they hold the rate at 5.25%, I think GBP/USD may possibly go down by 50 pips or more in the first hour of the report. There should be comments accommodating the statement, and comments are going to be important. Even if they are going to cut by 0.25% but some interesting comments are released, it may be a very tradable report.

SUMMARY:
* Report: U.S. Interest Rate Statement
* Buy on GBP/USD if they will cut the rate by 0.50% to 4.75%
* Sell on GBP/USD if they will hold the rate at 5.25%
* If the trigger is hit, expect 50 pips or more in the first hour of the report.
* Watch out for comments.

That's pretty much all for Tuesday. I hope we will both make some good money.

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