Forex Fundamental Analysis - 31 January 2008




Thursday, January 31st, 2008 (2:00 a.m. New York Time) UK
At 2 a.m. we will have UK Nationwide House Price m/m coming out. It is expected to come out at -0.4%. I would use 0.3 trigger on this one. Keep in mind that this is a quite new indicator so don't be so sure with your decisions and consider smaller profit targets like 10 to 20 pips, If it continues going on, so be it. If it gives a really good number such as 0.6 trigger, you may try to put a long term sell trade on EUR/GBP and try to bank 100 pips over the time, or if it comes very low, you may want to buy GBP/EUR for a long term position. In the short term we trade I would use 0.3 trigger. If it comes out at -0.1% or better (0 or positive), I would look to buy GBP/USD or GBP/JPY, and expect 25 to 30 pips of the price action on GBP/USD. If it comes out lower than expected, such as -0.7 or more negative, I would sell GBP/USD or GBP/JPY for a similar price action.

Thursday, January 31st, 2008 (5:00 a.m. New York Time) EURO ZONE
At 5 a.m. we will have Eurozone Estimate CPI y/y. I would trade this with 0.2 trigger. If it comes out at 3.3% or higher, you want to buy EUR/USD, and 2.9% or lower you want to sell EUR/USD, looking for 25 pips or more in the first half hour of the report.

Thursday, January 31st, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have Canadian GDP coming out. I would trade it with 0.2 trigger. If it comes out 0.4% or higher, I would sell USD/CAD, looking for 30 pips or so of the price action. If it comes out at 0 or negative, that would be weakening the Canadian dollar, and I would buy USD/CAD and look for 30 pips or so of the price action. Some people may want to trade EUR/CAD because of the U.S. reports coming out at the same time but keep in mind that if the U.S. report moves EUR/USD, it will also affect EUR/CAD.

Thursday, January 31st, 2008 (8:30 a.m. New York Time) USA
At 8:30 a.m. we will also have U.S. Core PCE. If it deviates by 0.2 which happens very rarely, it will move the market as well. If it comes out at 0.4% or higher, that is going to be strengthening for the U.S. dollar, and you can go short on EUR/USD or GBP/USD, looking for 25 to 35 pips of price action. If it comes out at 0 or negative, that would be weakening for the U.S. dollar, and you want to go long on EUR/USD or GBP/USD, whichever looks better at that time. Of course, if you have all other indicators in line deviating the same way, it may move the market even more.

Thursday, January 31st, 2008 (8:30 a.m. New York Time) USA
Also at 8:30 a.m. we will have U.S. Initial Jobless claims coming out. It is expected to come out at 320 K. If there is a 20 K trigger on the initial jobless claims, you may consider entering the trade. If it comes out at 340 K or higher, that would be weakening the U.S. dollar, and I would trade USD/JPY on that ASSUMING THERE ARE NO CONFLICTS, and I would sell the USD/JPY. If it comes out at 300 K or lower, that would be third month in the row it is lower, and it would be a very positive indication that jobs are doing OK, and I would buy USD/JPY on this, expecting around 30 pips of the price action.

Thursday, January 31st, 2008 (9:42 a.m. New York Time) USA
At 9:42 a.m. we will have Chicago PMI. Not a great indicator so I will not be paying attention to it.



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