Forex Fundamental Analysis - 12 February 2008




Tuesday, February 12th, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we will have UK CPI coming out. There will be a lot of speculations about high inflation because the PPI just came out record high today. However, historically there was not any strong relationship between big CPI and big PPI numbers. The headline CPI is expected to come out at 2.3%. Sell trigger will be more safe because if the CPI comes out low, it would be a big surprise so I will widen a buy trigger a little bit. If it comes out at 2.6% or higher (on y/y headline), then I would buy GBP/USD, looking for 40 to 50 pip of a price action in the first hour. If it comes out at 2.1% or lower, I would sell GBP/USD and look for 40 to 50 pips as well. If it comes out at 2.2% it may still be enough to sell but it will all depend on pre-release price action. If you want to play safe, stick with 2.1% trigger.

Tuesday, February 12th, 2008 (5:00 a.m. New York Time) GERMANY, EURO ZONE
At 5:00 a.m. we will have German ZEW. I would not worry to much about it; sometimes it moves a little, some other times it is a waste of time. If it is going to deviate extremely high like PPI today, then you would get some price action but such miracles happen once a blue moon.

Tuesday, February 12th, 2008 (4:45 p.m. New York Time) NEW ZEALAND
At 4:45 p.m. we will have New Zealand PPI but it also will not create big moves unless the deviation is huge. If you have nothing better to do, you can look for crazy deviations.

Tuesday, February 12th, 2008 (7:01 p.m. New York Time) UK
At 7:01 p.m we will have UK RICS House Price Balance which may be a good one to get a few pips out of it. It is expected to come out at -52%. -50% is kind of low, you will not see -80% or -90%, so they expect record low this month. I would trade it with 5% trigger. If we see -57% or more negative, I would be selling GBP/JPY, looking for 40 to 60 pips in a first hour of the report. If it comes out at -47% or less negative, I would buy GBP/JPY and look for 40 to 60 pips. We may even see 100 pips move.




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