FX TRADING STRATEGY FOR NOV 22
Today i'll be sitting and watching for 2 important data one will be
out from UK and another one inflation data from Canada.
1. Wednesday, November 22nd, 2006 (4:30 am New York Time) UK
We have Bank of England minutes coming out. There are three things
that I will be looking for in this report. First is the vote. It's
expected that 8 out of 9 members voted for the BOE rate hike last
month. The only guy that's been opposing the hikes, including the
August one, is Blanchflower. If Blanchflower happens to agree with
the last hike, and the vote is 9:0, then I may possibly go long on
GBP/USD. If there is someone else that happens to share the same
opinion as Blanchflower, and the vote is 7:2, instead of 8:1, then I
may possibly go short on GBP/USD. Second thing that I will be looking for is whether anybody made any suggestions of a 0.50 rate hike. If that's the case, then the GBP/USD will probably stengthen short term. And of course, most importantly, I will be looking for hints of a future rate hike, if the Bank of England gives any hints of such possibility, pound will probably strengthen some more. Most likely though, BOE officials will complain about inflation threats, basically justifying the rate hike that they did, and the biggest trigger for the trade would be that vote. 9:0 is extremely unlikely, and 7:2 is a possibility.
2. Wednesday, November 22nd, 2006 (7:00 am New York Time) CANADA
Tomorrow, we have the biggest report coming out, which is Canadian CPI. We have two numbers, the headline number and the core number.
There are a lot of changes Canada made to the core report recently.
If you remember, it used to be CPI x 8 volatile items. Well...it's
not that anymore. Now, for the first time, it's core number, which
excludes the volatile items, but it also excludes some other tax
related items, so the one to focus on is the annual number, because
it will involve some revisions on previous number. It's expected
at 2.3%. If it comes out at 2.4% or higher, I may possibly go short
on USD/CAD. If it comes out at 2.1% or lower, I may possibly go
long on USD/CAD. Remember, if the headline number comes out
conflicting, we may see some volatilily in the opposite direction
for the first few seconds.
out from UK and another one inflation data from Canada.
1. Wednesday, November 22nd, 2006 (4:30 am New York Time) UK
We have Bank of England minutes coming out. There are three things
that I will be looking for in this report. First is the vote. It's
expected that 8 out of 9 members voted for the BOE rate hike last
month. The only guy that's been opposing the hikes, including the
August one, is Blanchflower. If Blanchflower happens to agree with
the last hike, and the vote is 9:0, then I may possibly go long on
GBP/USD. If there is someone else that happens to share the same
opinion as Blanchflower, and the vote is 7:2, instead of 8:1, then I
may possibly go short on GBP/USD. Second thing that I will be looking for is whether anybody made any suggestions of a 0.50 rate hike. If that's the case, then the GBP/USD will probably stengthen short term. And of course, most importantly, I will be looking for hints of a future rate hike, if the Bank of England gives any hints of such possibility, pound will probably strengthen some more. Most likely though, BOE officials will complain about inflation threats, basically justifying the rate hike that they did, and the biggest trigger for the trade would be that vote. 9:0 is extremely unlikely, and 7:2 is a possibility.
2. Wednesday, November 22nd, 2006 (7:00 am New York Time) CANADA
Tomorrow, we have the biggest report coming out, which is Canadian CPI. We have two numbers, the headline number and the core number.
There are a lot of changes Canada made to the core report recently.
If you remember, it used to be CPI x 8 volatile items. Well...it's
not that anymore. Now, for the first time, it's core number, which
excludes the volatile items, but it also excludes some other tax
related items, so the one to focus on is the annual number, because
it will involve some revisions on previous number. It's expected
at 2.3%. If it comes out at 2.4% or higher, I may possibly go short
on USD/CAD. If it comes out at 2.1% or lower, I may possibly go
long on USD/CAD. Remember, if the headline number comes out
conflicting, we may see some volatilily in the opposite direction
for the first few seconds.
posted by Naveen Pantera at 9:47 AM
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