FX Trading Strategy for 10/31/2006
Here is what's going on tomorrow.
1. Tuesday, October 31st, 2006 (8:30 am New York Time) CANADA
We have Canadian GDP coming out for the month of August. Most economists predict that it will be around 0.2% to 0.3%. If it comes out at 0.5% or higher, I may possibly go short on EUR/CAD. If it comes out at 0.0% or negative, I may possibly go long on EUR/CAD. I like trading EUR/CAD on this report, because it has much bigger range, due to Canadian dollar being much cheaper in comparison to Euros as opposed to U.S. dollars. Also, there is another employment index report coming out simultaneously out of United States, and I don't want any conflicts associated with trading USD cross pair. If my triggers get hit, I would expect a move of around 50 pips.
2. Tuesday, October 31st, 2006 (10:00 am New York Time) USA
We have Consumer Confidence coming out of United States, together with Chicago PMI. I'll focus on Consumer confidence to make an immediate trade before the spike, however once I am in, I will definitely take into consideration the Chicago PMI, and if there are conflicts, I will exit immediately.
Basically consumer confidence is the first report for the month of October, and is more important this month than usual, because it's expected to be way better than last month, due to low gas prices, which is supposed to counter the depressing housing situation that high interest rates have caused. It's expected to come out at 108.0 versus 104.5 last month. If the number comes out at 104.5 or lower, that would mean that lower gas prices had very little effect, and would re-confirm depressing situation for the dollar. If the number comes out at 110 or higher, we are starting off the month of October reports with a lot of hope for a better month for the U.S. than September. So if the number comes out at 104.5 or lower, I may possibly go long on GBP/USD. If the number comes out at 110.0 or higher, I may possibly go short on GBP/USD. Anything in between would be a no trade. As soon as I am in a trade, I'll look at Chicago PMI, and if it comes out not conflicting, it would be very nice. If it conflicts by a lot, I may consider exiting, if it conflicts just by a little, I may stay. I'll have to see when the situation arises...too many possibilities to make predictions.
1. Tuesday, October 31st, 2006 (8:30 am New York Time) CANADA
We have Canadian GDP coming out for the month of August. Most economists predict that it will be around 0.2% to 0.3%. If it comes out at 0.5% or higher, I may possibly go short on EUR/CAD. If it comes out at 0.0% or negative, I may possibly go long on EUR/CAD. I like trading EUR/CAD on this report, because it has much bigger range, due to Canadian dollar being much cheaper in comparison to Euros as opposed to U.S. dollars. Also, there is another employment index report coming out simultaneously out of United States, and I don't want any conflicts associated with trading USD cross pair. If my triggers get hit, I would expect a move of around 50 pips.
2. Tuesday, October 31st, 2006 (10:00 am New York Time) USA
We have Consumer Confidence coming out of United States, together with Chicago PMI. I'll focus on Consumer confidence to make an immediate trade before the spike, however once I am in, I will definitely take into consideration the Chicago PMI, and if there are conflicts, I will exit immediately.
Basically consumer confidence is the first report for the month of October, and is more important this month than usual, because it's expected to be way better than last month, due to low gas prices, which is supposed to counter the depressing housing situation that high interest rates have caused. It's expected to come out at 108.0 versus 104.5 last month. If the number comes out at 104.5 or lower, that would mean that lower gas prices had very little effect, and would re-confirm depressing situation for the dollar. If the number comes out at 110 or higher, we are starting off the month of October reports with a lot of hope for a better month for the U.S. than September. So if the number comes out at 104.5 or lower, I may possibly go long on GBP/USD. If the number comes out at 110.0 or higher, I may possibly go short on GBP/USD. Anything in between would be a no trade. As soon as I am in a trade, I'll look at Chicago PMI, and if it comes out not conflicting, it would be very nice. If it conflicts by a lot, I may consider exiting, if it conflicts just by a little, I may stay. I'll have to see when the situation arises...too many possibilities to make predictions.
posted by Naveen Pantera at 3:30 PM
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