Forex Trading Signal 02/08/08

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

Let's first review what happened on Thursday.

First, we had UK Industrial Production coming out. It came out -0.1% versus 0.2% so it almost hit the trigger but based on my signal it was a no trade. GBP/USD moved about 40 pips in the first 10 minutes.

Then we had Interest rate decisions both in the UK and Eurozone. Both came out as expected so no real opportunity to enter the trade.

At 8:30 a.m. we had Trichet speaking. I actually thought his comments were fairly hawkish. He mentioned the importance of the raising inflation but he said a few things opening the door to a possible cut rate. He said they would closely monitor developments and risks of grow were high. He did not say they would cut rates; he said if it will be needed, they might cut the rates. To make the long story short, I was surprised of the sell off on EUR/USD. Watch the video for more details.

Let's talk about tomorrow.

1. Friday, February 08th, 2008 (1:45 a.m. New York Time) SWITZERLAND
We at 1:45 a.m will have Swiss CPI coming out. It is expected to come out at -0.5%. I would trade y/y number which is expected to come out at 2.2%. I would trade it with 0.3 trigger so if it comes out at 2.5% or higher, I would sell USD/CHF, looking for 25 to 30 pips of a price action. If it comes out at 1.9% or lower, you may consider buying USD/CHF, looking for 25 to 30 pips of a price action. This one moves very SLOW so you can set up your SL 5 pips below prerelease and wait patiently for 25 to 30 pips of a price action.

2. Friday, February 08th, 2008 (7:00 a.m. New York Time) CANADA
At 7 a.m. we will have Employment Change out of Canada. It is expected to come out at 10K. We had 4 months in a row with big triggers, and 3 out of 4 moved the market by 100 pips so it is a big trading opportunity. I would trade 15 K trigger on this. If it comes out at 25K or higher, you may want to sell USD/CAD, looking for 30 to 40 pips of a price action. If it comes out at -5K or lower, then you want to buy USD/CAD, looking for 30 to 40 pips of a price action. If it hits wider trigger like 30K deviation, the price move may double or even triple.

Just quick update on GBP/JPY to the call I made a few days ago. I said we will see GBP/JPY trading as low as 207.00 but we saw even lower at 206.00. I still think it can go even lower to 205.00 but this is not as high probability as it was a few days ago. I took my majority of profits at 206.00 level. If we break 205.00 then we may see 202.00 in few days, I believe.


Thank you and good luck with your trades.

To Our Success!

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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!

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Forex Trading Signal 02/04/08

Forex Trading Signal 02/04/08 - Today, 10:25 AM

Let's first review what happened earlier today.

On Friday we had UK Manufacturing PMI. It almost did out trigger but since "almost" DNE in the Forex world, it was a no trade. The signal did not work too well but eventually it GBP/USD went down. Actually it was good it was a no trade, no regrets here.

At 8:30 we had U.S. Non-Farm Payroll together with Employment Change coming out. The NFP came out -17K versus 55K expected. The Employment Rate came out a little bit better but not by 0.2. We also had conflicting revision which canceled each other out. We saw 90 pips down on USD/JPY, and it started recovering.

Then ISM Manufacturing came out very high, I don't remember if I ever seen 3.7 deviation on this indicator. Not only it came out higher, it came out positive signaling expansion instead of expected contraction. USD/JPY traded high about 50 pips, and the double top was a great place to get out.

So, on Friday we had two conflicting signals: a bad NFP and a good ISM Manufacturing.

PLEASE, WATCH THE VIDEO FOR DETAILED FRIDAY REVIEW.

On Monday we will have a few opportunities to enter a good trade.

1. Monday, February 04th, 2008 (4:45 p.m. New York Time) NEW ZEALAND
At 4:45 p.m. New York time we will have New Zealand Labor Cost q/q. It is a new indicator so it is kind of hard to predict how it is going to perform. It is expected to come out at 0.9% and I would use 0.2 trigger on it. If it comes out at 1.1% or higher, I would consider buying New Zealand dollar or at least watch it. I am not sure what kind of price action we would get, I am thinking of 25 pips or so. If it comes out low at 0.7% or lower, you may want to sell New Zealand dollar, and expect 20 to 25 pips or so. Watch out for any possible conflicts with Average Earnings that are supposed to come out at 0.8% so in case of conflict just stay out. If you don't want to trade it which is very understandable, at least watch the price action and see what will happen.

2. Monday, February 04th, 2008 (7:30 p.m. New York Time) AUSTRALIA
At 7:30 p.m. New York time we will have Australian Retail Sales. The interest statement that will be announcement a few hours later can either make this report stronger or weaker but most likely it is going to make it less important. Last month 0.3 deviation created great price actions; however, I would like to be more conservative here. I will be trading 0.4 trigger just because of that interest rate statement. Keep a closed eye on the Retail Sales X Inflation q/q that is expected to come out at 1.1% - make sure there is no conflict there. The retail sales m/m is expected at 0.6%, and it it comes out at 1.0%, I would buy AUD/USD and look for 25 to 35 pips of the price action. It if comes out at 0.2% or lower, I would sell AUD/USD and look for 25 to 35 pips of price action. Avoid conflicts there.

3. Monday, February 04th, 2008 (10:30 p.m. New York Time) AUSTRALIA
At 10:30 p.m. we will have Australian Interest Rate statement coming out. They are expected to raise rates from 6.75 to 7.00%. About 8% of economists expect them to leave the rate unchanged. If they leave the rate unchanged, it would be a sell signal on AUD/USD and AUD/JPY, and expect 50 to 70 pips of the price action. If they hike the rates to 7.00%, the reaction will mostly depend on the commentary. They should comment whether they will hike or not, so keep pay attention to it.

That's all for Monday.

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

To Our Success!

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