Forex Fundamental Analysis - 04 February 2008



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.

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.

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.


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