Forex Trading Signal 05/06/08

Forex Trading Signal 05/06/08 - Today, 02:23 AM

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Hi my dear Trader

Today we had only one report, and that was U.S. ISM Non-Manufacturing. It came out at 52 so it was a big positive surprise and a buy signal on USD/JPY. The price moved by 20 pips so you could get in anywhere here, and then it moved another 25 pips. Eventually the price action reversed because of the oil. The short term reaction was definitely solid, however.

Let's talk about Tuesday.

1. Tuesday, May 06th, 2008 (12:30 a.m. New York Time) AUSTRALIA
At 12:30 a.m. we are going to have Australian Monetary Policy Statement. It is widely expected they will hold the rates at 7.25%. If they cut the rates to 7.00%, it would be a clear sell signal on AUD/USD. If they raise the rates to 7.50%, it would be clear buying opportunity on AUD/USD. In either case, I would expect 50 to 70 pips price move. In addition to the interest rate decision, they will also issue a statement. If the statement is hawkish (like they are expecting to hike rates soon), you may want to buy AUD/USD; if it is clearly dovish (like they might want to cut the rates by the end of summer), you may want to sell AUD/USD.

2. Tuesday, May 06th, 2008 (1:45 a.m. New York Time) SWITZERLAND
At 1:45 a.m. we will have Swiss CPI y/y coming out. The CPI m/m is expected to come out at 0.9%, and the y/y is expected to come out at 2.4%. I would prefer to trade CPI y/y with 0.2 deviation. If it comes out at 2.6% or higher, you may want to sell USD/CHF, looking for about 30 to 35 pips of price action. If it comes out at 2.2% or lower, it would be a good buying opportunity on USD/CHF, good for 30 to 35 pips.

3. Tuesday, May 06th, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we will have UK Services PMI. I would trade it with 0.8 trigger. If it comes out at 52.5 or higher, I would buy GBP/USD or GBP/JPY, and expect 30 to 40 pips move. If it comes out at 50.9 or lower, then it would be a sell signal on GBP/USD or GBP/JPY, good for 30 to 40 pips as well. With a wider trigger, you can expect even bigger price move here.

4. Tuesday, May 06th, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have Canadian Building Permits coming out. I will be a bit more conservative here, and I will use about 3.0 trigger here. If it comes out at 4.0% or higher, I would be a sell signal on USD/CAD; if it comes out at -2.0% or more negative, then it would be a buy signal on USD/CAD. If the trigger is hit, I would expect about 30 pips price action.

5. Tuesday, May 06th, 2008 (10:00 a.m. New York Time) CANADA
At 10:00 a.m. we will have Ivey PMI out of Canada. I like this indicator, and I will use 4.0 trigger here. If it comes out at 59.0 or higher, I would sell USD/CAD. On the other hand, if it comes out at 51.0 or lower, I would buy USD/CAD. In either case, I would look for 40 pips price action.

That's all for Tuesday.

Thank you and good luck with your trades.

To Our Success!