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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