Forex Trading Signal 02/06/08

Forex Trading Signal 02/06/08 - Today, 06:55 AM

Let's first review what happened on Tuesday.

The UK Halifax Houses Index came out very close to expectations so it was a no trade. The price action was not great either.

Then we had UK Services PMI which came out very close to expectations so it was another no trade.

The only one thing worthy taking today was the ISM Non-Manufacture Index. It had a historically high deviation. It was expected to come out at 53.0 but it came out 41.9. Not only it came out so low, they decided to release it early at 8:55 a.m., and that was 5 to 10 minutes notice it might came out early. Officially the released a statement the security was compromised a little so they decided to release it early. I personally think this explanation is a complete load of crap. If that was released at 10 a.m., we would have massive panic on equities so we would probably see much more damaging trading day that we did since it was released before the equity market opened. I personally believe it was more political decision. Deviation of 3 of 4 would be bad for this, I don't think I ever seen 11.1 deviation. Not only it is a huge deviation, it is the lowest number we have seen since Nov 5th, 2001. Since services account for most of the U.S. economy, this may lead to recession. On Diamonds room we shorted on USD/JPY from 107.20 and the price moved down to 106.67. I think from now on we may be much lower on GBP/JPY as well, establishing new lows. Look for opportunities to make shorts on GBP/JPY.


Let's better talk about Wednesday.

1. Wednesday, February 06th, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have Canadian Building Permits coming out. I would trade it with 5 deviation. If we get 4.5% or higher on Canadian building permits, you want to sell USD/CAD for 30 pips or so in the first 15 minutes of the report, and maybe 40 to 50 pips in the first hour. If it comes out at -5.5% or more negative, I would buy USD/ CAD and look for 30 pips in the first 15 minutes, and about 40 to 50 pips in the first hour of the report.

2. Wednesday, February 06th, 2008 (10:00 a.m. New York Time) CANADA
At 10:00 a.m. we will have Canadian Ivey PMI coming out. Last month it came out at -6.1 deviation and it moved almost 100 pips in the first 15 minutes so it was a huge appreciation on the USD/CAD. Although we had ISM Non-Manufacturing at the same time, it came out very close to expectations so that was a no trade. Sometimes this report is worthy 20 to 30 pips, but some other times it moves much more. It is going to come out at 47, and I am recommending using a 5 trigger on this. If it comes out at 52 or higher, you may want to sell USD/CAD and look for about 30 pips of the price action, potentially more. If it comes out at 42 or less, you may want to buy USD/CAD and look for 30 pips or more.

3. Wednesday, February 06th, 2008 (4:45 p.m. New York Time) NEW ZEALAND
At 4:45 p.m. we will have New Zealand Unemployment Rate & Employment Change coming out. It used to be Unemployment Rate moving the market as they never announcement employment change number but they started announcing quarterly employment change since last August, and on November we saw a conflict on it, and Employment Change dominated the price action. I would trade Employment Change with 0.4% so if it comes out flat at 0.0% or lower, then sell NZD/USD looking for 30 pips of the price action. If it comes out at at 0.8% or higher, then you may want to buy NZD/USD and look for 30 pips of the price action to the upside.


Thank you and good luck with your trades.

To Our Success!