FX Trading Strategy for Nov 24
1. Friday, November 24th, 2006 (4:30 am New York Time) UK
We have UK GDP coming out of UK. That's GDP for the 3rd quarter, and it's second preliminary estimate, which means not all the data has been gathered, but it gives everyone the second glimpse. About 75% of the economists are expecting the number to come out same as it was last month at 0.7%. And 25% of economists think, that more data will bring the GDP down to about 0.6%. If the number comes out at 0.8% or more, it would be a pleasant surprise, and I may possibly go long on GBP/USD. Just watch out for that 1.9180 level. It's yearly high, and though I am hoping that this GDP number will break it, it may not happen. If it decisively breaks it, I think it's very possible to see 1.9220. Breaking of that level will heavily depend on where the price is at before the report. If it stays above 1.9150, a break is possible, if it stays below 1.9120, the break is unlikely in my opinion.
If GDP comes out at 0.6% or lower, I may possibly go short on GBP/USD, but it will be a very short term trade...watch out for those bulls bidding at the 1.9100s levels. After taking some profits on initial spike if I have to go short, I may re-enter the trade at the low 1.9100s. But again, all this stuff will depend on where the GBP/USD price level is at before the report.
Don't expect any miraculous deviations out of this report. This time UK government will simply have about 20% more data than they did last month for the same GDP time period, so high fluctuations are not possible mathematically. 0.1% deviation is possible, but unlikely, 0.2% deviation would be a shock, 0.3% deviation or higher, would be on the verge of impossible.
We have UK GDP coming out of UK. That's GDP for the 3rd quarter, and it's second preliminary estimate, which means not all the data has been gathered, but it gives everyone the second glimpse. About 75% of the economists are expecting the number to come out same as it was last month at 0.7%. And 25% of economists think, that more data will bring the GDP down to about 0.6%. If the number comes out at 0.8% or more, it would be a pleasant surprise, and I may possibly go long on GBP/USD. Just watch out for that 1.9180 level. It's yearly high, and though I am hoping that this GDP number will break it, it may not happen. If it decisively breaks it, I think it's very possible to see 1.9220. Breaking of that level will heavily depend on where the price is at before the report. If it stays above 1.9150, a break is possible, if it stays below 1.9120, the break is unlikely in my opinion.
If GDP comes out at 0.6% or lower, I may possibly go short on GBP/USD, but it will be a very short term trade...watch out for those bulls bidding at the 1.9100s levels. After taking some profits on initial spike if I have to go short, I may re-enter the trade at the low 1.9100s. But again, all this stuff will depend on where the GBP/USD price level is at before the report.
Don't expect any miraculous deviations out of this report. This time UK government will simply have about 20% more data than they did last month for the same GDP time period, so high fluctuations are not possible mathematically. 0.1% deviation is possible, but unlikely, 0.2% deviation would be a shock, 0.3% deviation or higher, would be on the verge of impossible.
posted by Naveen Pantera at 3:31 PM
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