Trading Signals and News Update For Friday

Yesterday we had the retail sales coming out of New Zealand, and I told you if it came out at 0.1% or lower, it would be a possible sell on NZD/USD. It came out at 0.2% so it did not hit my trigger so it was a no trade. NZD/USD slightly went down by 10 pips, and then it continued going up. In addition to that, we saw a conflicting revisions and other numbers. It was a no trade anyway.

Let's now talk about today, Friday.

1. Friday, October 12th, 2007 (8:30 a.m. New York Time) USA
Tomorrow we will have one set of reports that are worthy watching and possibly trading, and that's U.S. retail sales and PPI. The most important reading out of all 4 readings will be the retail sales CORE which is expected at 0.3%. Usually in September retail sales out of the U.S. is coming out strong. However, the last year and now retail sellers have been reporting worse data than everybody is expecting. They are expecting 0.3% which is basically nothing comparing to the last month it went down by 0.4%. If retail sales core reads at 0% or negative, that would be even worse than everybody is expecting, and probably bad for the U.S. dollar, and GBP/USD may possibly go up by 40 pips or more in the first 30 minutes of the report. The reason why I am saying 30 minutes is because we have Bernanke speaking 40 minutes later, and you don't want to be in trade with retail sales while Bernanke speaks because he may say something that may completely change the market direction. On the other hand, if the retail sales comes out at 0.6% or higher, that would be a pretty good rebound, more than everybody is expecting, and even more than decline of the last month, and I think based on that GBP/USD may possibly go down by around 40 pips or more in the first 30 minutes of the report. We also have the headline retail sales which normally does not conflict but watch out for any possible conflicts here. There are also possibilities for revisions, and we also have the PPI. The core PPI is the most important one but, unlikely to the headline number, it almost never deviates significantly as it is a very steady indicator. If there is a conflict between PPI and retail sales, we may see a retracement on the initial spike but I think the retail sales will pull this move out. Obviously, because so many indicators are coming out at the same time, it is always hard for me to do any analysis here so use the triggers if there is no big conflict. If there is a big conflict, then you need to look at it and judge, possibly just stay out. After the spike I would like to enter within 10 to 15 pips of the pre-release price, and maybe use 20 pips stop loss, and try to get 20 to 25 pips profit. Obviously, if you are able to enter with a price that is very close to the pre-release price, your SL can be smaller and TP may be bigger.

That's pretty much all for today.

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Trading Signals and News Update For Thursday

Yesterday we had only one report coming out that we were watching and possibly trading, and that was the Australian employment change. As you could see, it did not hit my trigger as it came out 13,000, and my trigger was 5,000 or below. There was also a conflicting number on the unemployment rate. The AUD/USD did not do much either. That was definitely a no trade.

Let's now talk about Today.

1. Thursday, October 11th, 2007 (8:30 a.m. New York Time) USA & CANADA
Tomorrow we will have a trade balance coming out of the USA and Canada, both at 8:30 a.m. Normally I trade them, but this time I am skipping them. Most of people don't care about U.S. trade balance. Canadian trade balance, however, used to be a good indicator but last month we saw a huge drop by 1.3 B as it was expected to come out at 5 B, and it came out at 3.7 B. We saw no price action at all. You can go to our calendar on ForexBastards website, and if you click on the file, you can see history charts for this indicator. As you can see there, although last month the deviation was 1.3 B, and U.S. trade balance came out as expected, USD/CAD went up 15 pips, and then it dropped by a lot more. It seems that the trade balance is not in focus right now so I don't want to take any unnecessary risk, and trade something that is not hot. I suggest you to skip this one.

2. Thursday, October 11th, 2007 (5:45 p.m. New York Time) NEW ZEALAND
Then we will have retail sales coming out of New Zealand. The number to focus on will be retail sales headline number as the core number has very little importance here. It is expected it will come out at 0.4%. If it comes out at 0.1% or below, that would be a second month in a row with a very low reading, and I think we may see NZD/USD going down by 30 pips or more in the first hour of the report. On the other hand, if the retail sales comes out at 0.7% or higher, we may see NZD/USD gaining 30 pips or more in the first hour of the report. Support and resistance levels as well as the amount of deviation will be important for this indicator, especially a support level on the downside. What is more, we may even see a 50 pips move if the deviation is bigger than 0.3% either direction but I think 30 pips is a very safe target here. Skip the spike, wait when the price retraces, and I would try to get in within 10 to 15 pips of the pre-release price, or maybe even as much as 20 pips if the deviation is huge like 1.00 or higher.

SUMMARY:
* Report: New Zealand Trade Balance
* Sell on NZD/USD if the number will be 0.1% or lower
* Buy on NZD/USD if the number will be 0.7 or higher
* If the trigger is hit, expect 30 pips or more in the first hour of the report.

That would be all for today.

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Trading Signals and News Update For Wednesday.

There will be only one thing that I will be watching, and possibly trading.

1. Wednesday, October 10th, 2007 (9:30 p.m. New York Time) USA
At 9:30 p.m. we will have Australian Employment Change coming out. It is expected to come out at 20,000 versus 32,000 last month. If it comes out at 35,000 or higher, that would be bullish for the Australian dollar, and AUD/USD may possibly move up by 40 pips or more in the first hour of the report. It may move a lot more if the deviation is bigger. On the other hand, if it comes out at 5,000 or lower, that would mean the employment market may be cooling, and that would probably be somewhat negative for the Australian dollar, and AUD/USD may possibly go down by 40 pips or more in the first hour of the report. I think the employment change is important at this moment as Australian dollar has been extremely strong recently because there were a lot of very strong indicators proving big strength of the Australian economy, and if the employment is better than last month, I think it is going to continue this trend. On the other hand, if the employment collapses to 5,000 or lower, people will start reconsidering that maybe Australian economy is slowing down as well, and I think AUD/USD may temporarily dive down. I would let the spike happening on this one, and then try to get in within 10 to 15 pips of the pre-release price, depending on how big the deviation is, and depending on any revisions and conflicts with the unemployment rate. Conflicts are very rare here.

SUMMARY:
* Report: Australian Employment Change
* Buy on AUD/USD if the number will be 35 K or higher
* Sell on AUD/USD if the number will be 5 K or lower
* If the trigger is hit, expect 40 pips or more in the first hour of the report.

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Trading Signals and News Update For Monday and Tuesday

1. Monday, October 8th, 2007 (4:30 a.m. New York Time) UK
On Monday we have have Columbus day out of the U.S. We do have UK Industrial production and PPI input coming out at the same time. I would skip this one simply because the Industrial production failed to create any moves last two months. Manufacturing simply does not matter in the UK at this particular time. Let's skip this one, and return to this indicator when manufacturing will be a hot indicator again.

2. Tuesday, October 9th, 2007 (4:30 a.m. New York Time) UK
On Tuesday at 4:30 a.m. we will have a trade balance coming out of the UK. It is expected -6.9 B versus -7.1 B. In my opinion, if the trade balance comes out at -8 B or more negative, that would probably be negative for the pound, and GBP/USD may possibly go down by 35 pips or more in the first hour of the report. On the other hand, if the trade balance is -6 B or less negative, that may be positive for the pound, and GBP/USD may possibly go up by 35 pips or so in the first hour of the report. This should be relatively simple to trade, there is no other conflicting indicator. I would try to get in after the spike within 0 to 10 pips of the pre-release price, depending on the deviation. Use maybe 15 pips SL, and maybe 20 to 25 pips TP, depending on the price action, and let see what happens there. If you are interested in seeing what this indicator did in the previous months, you can go to Forexbastard calendar, and click on a little file box icon, and you will be able to see a history of that indicator for the last few months.

SUMMARY:
* Report: UK Trade Balance
* Sell on GBP/USD if the number will be -8 B or more negative
* Buy on GBP/USD if the number will be -6 B or less negative
* If the trigger is hit, expect 35 pips or more in the first hour of the report.

3. Tuesday, October 9th, 2007 (2:00 p.m. New York Time) USA
Then at 2 p.m. New York time we will have FOMC meeting coming out. This one will be pretty important. During the last FOMC meeting the Fed cut the rate by a half of point, and we saw a very nice move on GBP/USD. A lot of people receiving these signals made a lot of money. There is one thing that is worth watching at this FOMC minutes. If they say that Fed is ready to cut more rates, I think that it would be negative for the U.S. dollar, and GBP/USD may possibly go up by 50 pips or more in the first hour of the report. If there is anything else said that does not hint towards future rate cuts, or if the Fed is being uncertain about what they will do in the next few months, then I would suggest to skip and not trade it. If you decided to trade, I would suggest to enter within 10 to 15 pips of pre-release price, after the initial spike, if they clearly state that they were planning to cut more rates.

That's all for now. Next signal will be on Tuesday,

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Trading Signals and News Update For Friday

1. Friday, October 5th, 2007 (7:00 a.m. New York Time) CANADA
At 7:00 a.m. New York time we will have Canadian Employment change coming out which is expected to read at 17,000 or so, very similar to the reading from the last month when it was 23,000. If for some reasons it comes out at 35,000 or higher, that would be the highest reading in the last 6 months, and it would signify a very resilient employment market in Canada, and I think based on that USD/CAD 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 0 or negative, that would mean a contracting employment market in Canada, and if it is a case, USD/CAD may possibly go up by 40 pips or more in the first hour of the report. If the deviation is much bigger, the move may be bigger as well. This report can move USD/CAD by as much as 80 pips or more, depending on the deviation. What I gave is a minimum deviation that I believe should move market by at least 40 pips.

SUMMARY:
* Report: Canadian Employment Change
* Sell on USD/CAD if the number will be 35,000 or higher
* Buy on USD/CAD if the number will be 0 or negative
* If the trigger is hit, expect 40 pips or more in the first hour of the report.

2. Friday, October 5th, 2007 (8:30 a.m. New York Time) USA
At 8:30 a.m. New York time we will have U.S. Non-Farm Payroll coming out. This indicator may be a little tough to trade because last month for the first time in a long time we saw a negative reading. Now the question is if whether it was a one-time fluke and it is going to be revised this month, or it was a legitimate reading that is going to set a new trend. The actual reading will matter a lot, and it is expected to rebound to 100,000 versus -4,000 last month. If for some reasons the reading is 150,000 or higher, I think it would be a message that possibly last month's reading was a fluke, and such a strong rebound may drive GBP/USD down by as much as 70 pips or more in the first hour of the report. On the other hand, if we had a reading of 50K or lower, that would be a pretty low reading after a negative reading, and I think based on that GBP/USD may possibly gain 70 pips or more in the first hour of the report. Of course, a revision will also matter. If for some reasons we will see a reading lower than expected, but the revision is revised from -4K to +60K, than it is not going to be bad for the dollar. That would be pretty normal, and possibly it would even be considered positively. Therefore, if the revision conflicts significantly, I suggest to stay out of this indicator; however, if the revision is not conflicting so the reading is above 100K and the revision is positive, this may amplify the move. Similarly, if the reading is below expectations, and revision is negative, it may amplify the move as well. If the deviation is large and a revision is not conflicting, this indicator may easily move the market by as much as 120 pips in the first hour of the report. It has happened before, and it may happen again - depending on the deviation.

SUMMARY:
* Report: U.S. Non-Farm Payroll
* Sell on GBP/USD if the number will be 150,000 or higher
* Buy on GBP/USD if the number will be 50,000 or lower
* If the trigger is hit, expect 70 pips or more in the first hour of the report.

That's all for Friday. I hope you will make some money on these big indicators.

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Trading Signals and News Update For Thursday

1. Thursday, October 4th, 2007 (7:00 a.m. New York Time) UK
At 7 a.m. New York time we will have UK interest rate decision. It is expected that they will hold the rate at 5.75%. If for some reasons they will hike it to 6.00%, GBP/USD may possibly gain 100 pips or more in the first hour of the report. If for some reasons they will cut the rate to 5.50%, GBP/USD may possibly go down by 100 pips or more in the first hour of the report. Such scenario is extremely unlikely. Watch for some comments out of UK, if there are any. If the UK government is dovish, and they mention anything about possibility of cutting rates in the future, expect GBP/USD to drop by 80 pips or more in the first hour of the report. On the other hand, if they talk about a possibility to hike the rate in the future, GBP/USD may go up by 80 pips or more in the first hour of the report.

2. Thursday, October 4th, 2007 (7:45 a.m. New York Time) EURO ZONE
At 7:45 a.m. New York time we will have Euro zone releasing their interest rate statement. It is expected they will hold the rate at 4.00%, same as last month, and if for some reasons they will hike the rate to 4.25%, EUR/USD may possibly gain 70 pips or more in the first hour of the report. If there is a surprise cut to 3.75%, EUR/USD may possibly go down by 70 pips or more in the first hour of the report. It is extremely unlikely they would cut a rate because Euro zone is still on the hiking spree. Also, there is going to be no speech; Trichet actually will be speaking at 8:30 a.m. New York time which is 45 minutes later.

3. Thursday, October 4th, 2007 (8:30 a.m. New York Time) EURO ZONE
At 8:30 a.m. we will have Trichet speech out of Euro zone. That speech may be a little bit too complicated to trade so I am not going to tell you how to do it. However, be very careful with your own trades at that moment as you may see some price actions that will affect all currencies against the Euro. At 8:30 a.m. I would just stay out of the market unless you really know what you are doing.

That's is all for Thursday.

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Trading Signals and News Update For Wednesday

1. Wednesday, October 3rd, 2007 (4:30 a.m. New York Time) UK
At 4:30 a.m. New York time we will have UK Services PMI coming out which is expected to read at 56.8. As you know, services is about 80% of UK economy, and this indicator measures how well this sector of economy is doing. If the reading is at 59 or higher, I think that would be pretty good for the pound, and I think we may see GBP/USD going up by 40 pips or more in the first hour of the report. On the other hand, if the reading reads at 55 or below, we may possibly see GBP/USD going down by 30 pips or more in the first hour of the report. Of course the bigger deviation is, the bigger the move can be.

SUMMARY:
* Report: UK Services PMI
* Buy on GBP/USD if the number will be 59 or higher
* Sell on GBP/USD if the number will be 55 or lower
* If the trigger is hit, expect 40/30 pips or more in the first hour of the report.

2. Wednesday, October 3rd, 2007 (8:15 a.m. New York Time) USA
At 8:15 a.m. New York time we will have ADP Employment Change coming out of the U.S. As you may already know, ADP tends to predict a little bit of what the U.S. Non-Farm Payroll will read on Friday. It is expected it would read 55,000 or so. In my opinion, if the reading is 100,000 or more, it would be positive for the U.S. dollar, and GBP/USD may possibly go down by 30 pips or more in the first hour of the report. On the other hand, if the reading is at 0 or negative, I think GBP/USD may possibly gain 30 pips or more in the first hour of the report because it would be negative for the U.S. dollar.

SUMMARY:
* Report: ADP Employment Change
* Sell on GBP/USD if the number will be 100,000 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.

3. Wednesday, October 3rd, 2007 (10:00 a.m. New York Time) USA
At 10:00 a.m. New York time we will have U.S. ISM Non-Manufacturing Index coming out. It is expected to read at 54.8. In my opinion, if this index reads 58 or higher, 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 reading reads 51 or lower, I think GBP/USD may possibly gain 30 pips or more in the first hour of the report. Remember, this is a very market moving indicator. Don't try to rush into it. Most likely it will spike, and go back to prerelease price so you could get a good entry on afterspike trade, regardless of deviation. Don't be fooled if the deviation is big. Even on big deviations the currency may not react that much on this indicator. Nevertheless, we should see at least 30 pips move.

SUMMARY:
* Report: U.S. ISM Non-Manufacturing Index
* Sell on GBP/USD if the number will be 58 or higher
* Buy on GBP/USD if the number will be 51 or lower
* If the trigger is hit, expect 30 pips or more in the first hour of the report.

That's all for Wednesday.


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