Todays FX Trading Strategy

Okay...here is what happened yesterday. We were watching two numbers. We were looking to place a trade based on UK Retail Sales, and place a trade based on U.S. Philly Fed Survey. The UK Retail sales came out WAY below expectations, hit my trigger for a short on GBP/USD, we saw the pound gradually dropping by about 50 pips. It was a nice slow and steady move,

Then we had the Philly Fed Survey coming out. I told you that if it comes out negative, it would be a good 20-25 pips move up on GBP/USD. It did come out negative and we did see the GBP/USD moving up immediately by 20 pips, then we saw a small retracement, and then it continued to even higher highs.

Okay, here is what's happening today.

1. Friday, October 20th, 2006 (4:30 am New York Time) UK
We have UK 3rd quarter GDP coming out. It's expected to be a bit weaker than 2nd quarter GDP. They are expecting it at 0.6%. If the number comes out at 0.7%, it would be good for the pound, so I may possibly go long on GBP/USD. If the number comes out at 0.5% or lower, it would be bad for the pound, so I may possibly go short on GBP/USD. If the number deviates by at least 0.1%, we may very well see a move of 50 pips or more either direction.

2. Friday, October 20th, 2006 (7:00 am New York Time) CANADA
We have Canadian CPI numbers coming out. I am going to be focusing on the core number, which excludes the volatile components. The monthly core number is expected to be at 0.2%. If the number comes out at 0.4% or higher, I may possibly go short on USD/CAD. If the number comes out at 0.0% or negative, I may possibly go long on USD/CAD.