Forex Trading Signal 01/08/08

Forex Trading Signal 01/08/08 - Today, 01:53 AM

Let's first review past Friday.

On Friday we had Swiss CPI. It did hit our trigger. The pre-release price on USD/CHF was 1.1128, and it traded down to as low as 1.1100 so only about 28 pips. I was expecting more especially with a very large downtrend we have been seeing all week. Unfortunately, that's all what we had. GBP/CHF traded from 2.1937 down to 2.1846 so GBP/CHF had 90 pips price action; however, it was still completely reversed.

Then we had UK Services PMI. We just missed our buy trigger. The price moved 85 pips so I wonder how many pips it would move if it did hit our trigger. GBP/JPY moved about 130 pips. If you took it because it was close to my trigger, you probably made a good money but the fact is it did not hit the trigger so it was a no trade.

Then we had the CPI out of Euro Zone. It came out exactly as it was expected so it was a no trade.

At 8:30 we had the U.S. Non-Farm Payroll. It came out at 18K so it did hit our buy signal on GBP/USD. Moreover, the unemployment rate came out at 5.00% with 0.2 deviation which was also pointing towards dollar weakness. They should weaken the dollar very well towards buy GBP/USD or sell USD/JPY. USD/JPY moved 100 pips in a few minutes, and it retraced back. The GBP/USD did not move up that much as it moved about 85 pips but EUR/USD moved a lot better.

Then we had ISM Non-Manufacturing, and it came out very close to expectations so it was a no trade. However, the Canadian Ivey PMI did hit our trigger. This one incredibly overreacted. It moved so quick so I did not get in, and it just kept going from 0.9922 to 1.0090. It was a lot of opportunity to buy USD/CAD on this report.

Let's now talk about Tuesday.

1. Tuesday, January 08th, 2008 (10:00 a.m. New York Time) USA
At 10 a.m. we will have U.S. Pending Home Sales coming out. It is expected to come out at -0.3%. I think we need to be more conservative on this report and use 5.0 trigger. If it comes out at 4.7% or higher, that would be positive for the U.S. dollar, and I would buy USD/JPY, looking for 30 pips move or more. If it comes out at -5.3 or more negative, I would sell USD/JPY and expect a move of 30 pips or more in the first hour of the report.

2. Tuesday, January 08th, 2008 (7:30 p.m. New York Time) AUSTRALIA
Then at 7:30 p.m. we will have Australian Retail Sales m/m coming out. It is expected to come out at 0.5%. I would trade 0.4 trigger on this one. If it comes out at 0.1% or lower, I would sell AUD/USD and expect 30 pips move. If it comes out at 0.9% or higher, that would be very positive for the AUD so you can buy AUD/USD and expect 30 pips move or more. Last month the number really overreacted and we saw 77 pips move on -0.4 deviation but in earlier releases sometimes you got a little more than 20 pips so be careful despite of December release. I think 30 pips is a good expectation - if you get more, great.

That would be all for tomorrow.

Thank you very much, and good luck with your trades.

To Our Success!