Todays FX Trading Strategy
Here is what's going on today...
1. Wednesday, October 18th, 2006 (4:30 am New York Time) UK We have Bank of England meeting minutes coming out from previous interest rate statement. Everybody is expecting Bank of England raising the rate next month, so a confirmation of that could be bullish for GBP/USD, but mostly already priced in. What would be really bullish for GBP/USD is a clue of possibly another rate hike after November. What would be short term bearish for GBP/USD is if there is some strong uncertainty about the rate hike in November.
2. Wednesday, October 18th, 2006 (8:30 am New York Time) USA
We have U.S. monthly CPI coming out. There is two numbers, the core number and headline number. My focus will be on the core number, which will exclude food and energy. Core number is expected at 0.2%, and headline number is expected at -0.3%, mostly due to drop in oil prices. If the core number comes out at 0.3% or higher, I may possibly go short on EUR/USD. If it comes out at 0.1% or lower, I may possibly go long on GBP/USD. Note that I picked these two different pairs. Reason being is that I don't want to go short against the general trend up in pound, that's why if I go short, it would be in the EUR/USD. If the number comes out as expected at 0.2%, I am not planning to trade it...however, it would probably be more good for the dollar than bad, because such number still signifies healthy economic growth, and inflation. The higher the inflation, the bigger the chance for Fed to do another rate hike.
1. Wednesday, October 18th, 2006 (4:30 am New York Time) UK We have Bank of England meeting minutes coming out from previous interest rate statement. Everybody is expecting Bank of England raising the rate next month, so a confirmation of that could be bullish for GBP/USD, but mostly already priced in. What would be really bullish for GBP/USD is a clue of possibly another rate hike after November. What would be short term bearish for GBP/USD is if there is some strong uncertainty about the rate hike in November.
2. Wednesday, October 18th, 2006 (8:30 am New York Time) USA
We have U.S. monthly CPI coming out. There is two numbers, the core number and headline number. My focus will be on the core number, which will exclude food and energy. Core number is expected at 0.2%, and headline number is expected at -0.3%, mostly due to drop in oil prices. If the core number comes out at 0.3% or higher, I may possibly go short on EUR/USD. If it comes out at 0.1% or lower, I may possibly go long on GBP/USD. Note that I picked these two different pairs. Reason being is that I don't want to go short against the general trend up in pound, that's why if I go short, it would be in the EUR/USD. If the number comes out as expected at 0.2%, I am not planning to trade it...however, it would probably be more good for the dollar than bad, because such number still signifies healthy economic growth, and inflation. The higher the inflation, the bigger the chance for Fed to do another rate hike.
posted by Naveen Pantera at 3:02 PM
0 Comments:
Post a Comment
<< Home