Forex Fundamental Analysis - 25 October 2007


Fundamental Analysis



Thursday, October 25th, 2007 (4:00 a.m. New York Time) GERMANY, EURO ZONE
On Thursday at 4:00 a.m. New York time we will have German IFO Business Climate and Expectation Index coming out. Frankly speaking, I don't like these indicators at this point of the economy. IFO and ZEW used to move Euro but it has not been happening lately. I would skip this one, and just watch a price action.

Thursday, October 25th, 2007 (8:30 a.m. New York Time) USA
Then at 8:30 New York time we will have U.S. Durable Goods coming out. I would be focusing on the Core Durable Goods. This particular indicator is not worth trading unless you really know a character of it and you are willing to play a retracement. Regardless of how big the deviation is, a spike and afterspike price price action may very much depend on the price action right before the report. It is possible to trade it but in order to make a proper decision you really have to analyze what is going on 30 minutes before the report. Since this signal is sent many hours in advance, I really cannot give you a good strategy for this indicator. As always, if you don't know what you are doing, I suggest you to skip that one.

Thursday, October 25th, 2007 (10:00 a.m. New York Time) USA
Then at 10 a.m. New York time we will have New Home Sales coming out. It is expected to come out at 775 K. I think if this report comes out at 600 K or below, we may see GBP/USD going up by 40 pips or more in the first hour of the report. On the other hand, if it comes out at 900 K or above, I think GBP/USD may possibly go down by 40 pips or more in the first hour of the report. Lower deviations may cause some price actions as well but it will heavily depend on the price action right before the report.

SUMMARY:
* Report: US New Home Sales
* Buy on GBP/USD if the number will be 600 K or below
* Sell on GBP/USD if the number will be 900 K or above
* If the trigger is hit, expect 40 pips or more in the first hour of the report.

Thursday, October 25th, 2007 (7:30 p.m. New York Time) JAPAN
Then at 7:30 p.m. New York time we will have Japan CPI. I would be focusing on the Core Tokyo CPI (excludes food) which is expected to come out at approximately 0%. If it comes out at 0.2% or higher, I think USD/JPY may possibly go down by 50 pips or more in the first hour of the report. On the other hand, a reading of -0.2% or more negative, I think USD/JPY may possibly gain 50 pips or more in the first hour of the report. This is assuming there are no big conflicts with other CPI numbers and no big revisions but generally speaking with such great deviation there is going to be not that many conflicts so I think these are relatively OK triggers. Nevertheless, conflicts always may complicate this trade.

SUMMARY:
* Report: Japan Core Tokyo CPI (excludes food)
* Sell on USD/JPY if the number will be 0.2% or more positive
* Buy on USD/JPY if the number will be -0.2% or more negative
* If the trigger is hit, expect 50 pips or more in the first hour of the report.

Thursday, October 25th, 2007 (7:50 p.m. New York Time) JAPAN
Then at 7:50 p.m. we will have Industrial Production coming out Japan. I am not going to give any triggers for this one because I suggest you to stay out of this indicator. This is an extremely unpredictable report. Sometimes it can really move the market; other times it may not. Also this trade would depend on the released CPI numbers

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