Forex Trading Signal 04/14/08

Forex Trading Signal 04/14/08 - Today, 04:00 AM
Hi my dear Trader

Let's first review what happened on Thursday.

On Thursday we had Norway CPI. The headline came out low but the underlined inflation was as expected so it was a no trade which was a good thing.

UK did cut the rates as expected so no trade here.

The interest rates did not change in Euro Zone so it was a no trade as well.

At 8:30 we had Canadian trade balance with a significant deviation of +1.5 B. The U.S. trade balance, however, came out much lower as it deviated by about -5 B from the expectation. We also had U.S. Initial Jobless Claims which came out much lower than expected. Lower U.S. trade balance is bad for the U.S. dollar but lower Jobless Claims is actually good for the U.S. dollar so it was a big conflict here. Based on the Jobless Claims we were looking for a long trade on USD/JPY but because of the trade balance, USD/JPY spiked down a little although within next 10 minutes it actually not only retraced but USD/JPY was climbing higher and higher. People who entered on the spike and put a lot of faith on the Jobless Claims were able to exit at BE or even make a decent profit. Those who entered on the spike but did not want to risk a lot, usually took a few pips loss. Because of such big conflict, it was hard to make a call on the "afterspike" trade.

We also had Trichet speaking and his speech was quite bullish.

Let's talk about Monday.

1. Monday, April 14th, 2008 (3:30 a.m. New York Time) SWEDEN
At 3:30 a.m. we will have Swedish CPI coming out. The underline inflation m/m is expected to come out at 0.5% and the underline inflation y/y is expected to come out at 2.1%. If the underline inflation y/y comes out at 2.3% or higher, that would be a good sell signal on EUR/SEK, and I would expect it to move by around 400 pips. If it comes out at 1.9% or lower, I would buy EUR/SEK and also look for around 400 pips move. It would be very good if there was some help from headline m/m and y/y number but it is not completely necessary - just make sure they are not conflicting.

2. Monday, April 14th, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we will have UK PPI but it is a very weird report. I would just skip that one.

3. Monday, April 14th, 2008 (8:30 a.m. New York Time) USA
At 8:30 a.m. we will have U.S. Retail Sales X Autos (also known as "Core"). It is probably the most important indicator in this week. I will try to trade it on USD/JPY. It is expected to come out at 0.1%, and I would trade it with 0.5 deviation. If it comes out at 0.6% or higher, it would be a good buy signal on USD/JPY. If it comes out at -0.4% or more negative, it would be a good sell signal on USD/JPY. If my trigger is hit, I would expect USD/JPY moving by around 40 pips. Also, try to avoid conflicts with the headline number here.

4. Monday, April 14th, 2008 (6:45 p.m. New York Time) NEW ZEALAND
At 6:45 p.m. we will have CPI q/q out of New Zealand. We have this indicator only once every three months. It is expected to come out at 0.8%. This indicator is not that hot and chances are good if we hit 0.2 to 0.3 trigger, NZD/USD may move 25 to 30 pips and consolidate then. However, this time we have a bit better time of a release - it is not near NY close like it used to be so NZD/USD can get more attention. If it comes out at 1.0% or higher, I would buy NZD/USD; if it comes out at 0.6% or lower, I would sell NZD/USD. In either case I would look for 30 pips move.

5. Monday, April 14th, 2008 (7:01 p.m. New York Time) UK
At 7:01 p.m we will have UK RICS House Price Balance coming out. I would skip that one but if it comes out very positive like -50 or better (less negative), it may move GBP/USD or GBB/JPY quite well but again, I would not worry too much about this report.

That's all for tomorrow.

Thank you and good luck with your trades.

To Our Success!