Fundamental Analysis
Thursday, January 10th, 2008 (4:30 a.m. New York Time) UK
Tomorrow we will have the UK Trade Balance coming out at 4:30 a.m. This indicator used to perform quite well but last 3 times it failed with 700 M or even 900 M trigger as the price action went the other way. If you want to trade this, use 1000 M (1 B) deviation. Therefore, if it comes out at -8200 M or more negative, that would be weakening the pound and I would look to sell GBP/USD and expect 30 pips move price action to the downside on the GBP/USD. On the other hand, if it comes out at -6200 M or less negative, then it would be positive for the U.S. pound and I would expect to see 30 to 40 pips move price action to the upside on the GBP/USD.
Thursday, January 10th, 2008 (7:00 a.m. New York Time) UK
At 7 a.m. we will have UK Interest Statement coming out. It is expected they will hold the rate at 5.5% because they just cut rates recently. There is also 20% to 25% economists expecting them to cut the rate. Here is what I am going to do: if they keep the rates unchanged, I would probably stay away although it can be strengthening the pound a little bit. If they cut the rates, I would sell GBP/USD or GBP/JPY and expect 50 pips or more and 100 pips or more in the first hour, respectively.
Thursday, January 10th, 2008 (7:45 a.m. New York Time) EURO ZONE
Then at 7:45 a.m. we will have Euro Zone Interest Rate Statement. It is unanimously expected they will hold the rates at 4.00%. If they hike the rates to 4.25%, you can buy EUR/USD and expect 50 pips or more price action in the first hour. If they cut the rates to 3.75% I would sell EUR/USD and expect 50 to 100 pips or more move to the downside.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) EURO ZONE
At 8:30 a.m. we will have a few things coming out at the same time. We will have Trichet speaking but if you want to trade what he is speaking, you need to be a little bit more advanced trader and be able to listen to his tone. If he uses the "strong vigilance" phrase it is usually very bullish and you want to buy EUR/USD. Selling EUR/USD is a bit more problematic and you really need to be more advanced trader to trade his speeches.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have Canadian Building Permits. It is expected to come out at -1.7%. Recently, building indicators out of several major countries started moving the market so we can try to trade this indicator with 5.0 trigger. Therefore, if it comes out at -6.7% or more negative, I would buy USD/CAD and expect 30 pips pips price action. If it comes out at 3.3% or higher, I would sell USD/CAD, and expect 30 pips price action. Last two months this indicator worked very well so it is time to start focusing on it.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) USA
At 8:30 a.m. we also have U.S. Unemployment Claims. It is expected to come out at 345 K. Usually, a 20K trigger is sufficient to trade and you can expect 25 pips price action on USD/JPY if the trigger is hit. Therefore, if it comes out at 365 K or higher, it would be bad for the U.S. dollar so I would sell USD/JPY. If it comes out at 325 K or lower, it would be good for the U.S. dollar and I would buy USD/JPY.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) USA
At 1 p.m. we will have Bernanke speech. This also is for more advanced traders so if you are new in trading fundamentals, I would stay away. Keep an eye on some possible interesting price actions at 1 p.m.
Tomorrow we will have the UK Trade Balance coming out at 4:30 a.m. This indicator used to perform quite well but last 3 times it failed with 700 M or even 900 M trigger as the price action went the other way. If you want to trade this, use 1000 M (1 B) deviation. Therefore, if it comes out at -8200 M or more negative, that would be weakening the pound and I would look to sell GBP/USD and expect 30 pips move price action to the downside on the GBP/USD. On the other hand, if it comes out at -6200 M or less negative, then it would be positive for the U.S. pound and I would expect to see 30 to 40 pips move price action to the upside on the GBP/USD.
Thursday, January 10th, 2008 (7:00 a.m. New York Time) UK
At 7 a.m. we will have UK Interest Statement coming out. It is expected they will hold the rate at 5.5% because they just cut rates recently. There is also 20% to 25% economists expecting them to cut the rate. Here is what I am going to do: if they keep the rates unchanged, I would probably stay away although it can be strengthening the pound a little bit. If they cut the rates, I would sell GBP/USD or GBP/JPY and expect 50 pips or more and 100 pips or more in the first hour, respectively.
Thursday, January 10th, 2008 (7:45 a.m. New York Time) EURO ZONE
Then at 7:45 a.m. we will have Euro Zone Interest Rate Statement. It is unanimously expected they will hold the rates at 4.00%. If they hike the rates to 4.25%, you can buy EUR/USD and expect 50 pips or more price action in the first hour. If they cut the rates to 3.75% I would sell EUR/USD and expect 50 to 100 pips or more move to the downside.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) EURO ZONE
At 8:30 a.m. we will have a few things coming out at the same time. We will have Trichet speaking but if you want to trade what he is speaking, you need to be a little bit more advanced trader and be able to listen to his tone. If he uses the "strong vigilance" phrase it is usually very bullish and you want to buy EUR/USD. Selling EUR/USD is a bit more problematic and you really need to be more advanced trader to trade his speeches.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have Canadian Building Permits. It is expected to come out at -1.7%. Recently, building indicators out of several major countries started moving the market so we can try to trade this indicator with 5.0 trigger. Therefore, if it comes out at -6.7% or more negative, I would buy USD/CAD and expect 30 pips pips price action. If it comes out at 3.3% or higher, I would sell USD/CAD, and expect 30 pips price action. Last two months this indicator worked very well so it is time to start focusing on it.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) USA
At 8:30 a.m. we also have U.S. Unemployment Claims. It is expected to come out at 345 K. Usually, a 20K trigger is sufficient to trade and you can expect 25 pips price action on USD/JPY if the trigger is hit. Therefore, if it comes out at 365 K or higher, it would be bad for the U.S. dollar so I would sell USD/JPY. If it comes out at 325 K or lower, it would be good for the U.S. dollar and I would buy USD/JPY.
Thursday, January 10th, 2008 (8:30 a.m. New York Time) USA
At 1 p.m. we will have Bernanke speech. This also is for more advanced traders so if you are new in trading fundamentals, I would stay away. Keep an eye on some possible interesting price actions at 1 p.m.
