Wednesday, September 19, 2007

Trading Signals and News Update For Wednesday

Today we will have 4 indicators coming out that are worth watching and possibly trading, or at least worthy mentioning in this email.

1. Wednesday, September 19th, 2007 (4:30 a.m. New York Time) UK
At 4:30 a.m. New York time we will have Bank of England meeting minutes coming out. I think this indicator is not worth watching because of what most recently happened with one of the bank institutions being in trouble in the UK, and pound lost over 200 pips. Those minutes are going to be pretty much pointless. If there is unanimous vote for holding the rate on the last meeting that will not do anything. If there was 8 to 1, 7 to 2, or 6 to 3, that should not matter that much either simply because the situation has changed tremendously since the last meeting, and I don't think the vote would be that important. In addition to that, some people even are talking about possible cut on interest rate due to all financial problems over there. I would just skip that one.

2. Wednesday, September 19th, 2007 (7:00 a.m. New York Time) CANADA
Then at 7 a.m. New York time, we will have Core CPI coming out of Canada. The most important reading is core CPI m/m. There is about a 50-50 split. Half of the economists are expecting 0.1%, and another half: 0.2%. If that comes out flat and 0% or negative, I think USD/CAD may possibly gain 50 pips or more in the first hour of the report. On the other hand, if the CPI reads 0.3 or higher, I think USD/CAD may possibly go down by 50 pips or more in the first hour of the report.

3. Wednesday, September 19th, 2007 (8:30 a.m. New York Time) USA
Then at 8:30 a.m. New York time, we will have US CPI coming out. The most important reading is the CPI core m/m. Most of the economist expects the reading to be at 0.2%, some expects 0.1%. If it reads 0.1% or 0.2%, that would probably be not much surprise. However, if it reads 0% or negative, there is no reason for the Fed not to continue cutting rates in the months to come because inflation is 0 or negative. This reading may send GBP/USD up about 50 pips or more in the first hour of the report. On the other hand, if it reads at 0.3% or higher, I think GBP/USD may possibly go down by 50 pips or more in the first hour of the report.

4. Wednesday, September 19th, 2007 (6:45 a.m. New York Time) NEW ZEALAND
Then at 6:45 p.m. New York time we will have current account balance out of New Zealand. It is a quarterly indicator so it blesses us with its presence only four times a year. It is expected that it will read about -3.29 billion. If it reads, -3.8B or more negative, I think NZD/USD may possibly go down by 30 pips or more in the first hour of the report. On the other hand, if the current account comes out at -2.8 or less negative, I think NZD/USD may possibly gain 30 pips or more in the first hour of the report. Don't rush into this trade; just let the spike happen unless you have a tool to trade a spike. Just try to get in on retracement within reasonable price in order to have reasonable SL and TP.

Let's hope we will make some good money today. Good luck with your trades.

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