FX Trading Signals for Dec 05
1. Tuesday, December 5th, 2006 (4:30 am New York Time) UK
We have Services PMI coming out of UK. Services indicators are not as important as manufacturing indicators, because services is a much more stable industry. Whether the economy is doing good or bad, you still need to go to the doctor, or use accountant, or lawyer, et cetera. So the market doesn't care much about services indicators, however if there is a surprise, there is usually a short term reaction to it. Most economists expect this number to come out between 58 and 59. If it comes out at 60 or above, I may possibly go long on GBP/USD. If it comes out at 56.9 or below, I may possibly go short on GBP/USD. This trade should be good for about 30 pips if my triggers are hit...assuming that the price is not near some strong levels right before the release.
2. Tuesday, December 5th, 2006 (8:30 am New York Time) USA
We have Non-Farm Productivity and Unit Labor Cost coming out of the U.S. This report is not that hot, but may create a move of around 30 pips in the GBP/USD pair if the deviation is significant. It's a report for 3rd quarter, and the expectations is that it will come out at around 0.5%. If it comes out at 0% or negative, that would be bad for the dollar, so I may possibly go long on GBP/USD. If it comes out at 1% or higher, that would be good for the dollar, so I may possibly go short on GBP/USD. Again, this is a very short term trade.
3. Tuesday, December 5th, 2006 (9:00 am New York Time) CANADA
We have interest rate statement coming out of Canada. It's expected that Canada will keep the rates unchanged at 4.25%. If they drop rates to 4%, I may possibly go long on USD/CAD. If they raise rates to 4.5%, I may possibly go short on USD/CAD. These scenarios are extremely unlucky, especially a rate hike, so the main focus will be the comments out of Bank of Canada at the moment of decision. If they say that they are planning to do a rate cut next year, I may possibly go long on USD/CAD.
4. Tuesday, December 5th, 2006 (10:00 am New York Time) USA
We have U.S. non-manufacturing index coming out of the U.S. Another not so strong report that measures services. It's really nothing compared to the manufacturing report we had last Friday. Expectations that it will come out at around 55 or so. If it comes out at 58 or higher, I may possibly go short on GBP/USD. If it comes out at 52 or lower, I may possibly go long on GBP/USD. We'll be lucky to get a 30 pips move out of this report. 20-25 pips is a more realistic expectation, so plan accordingly. I'll take into consideration the other reports before this trade, and watch out for factory orders conflicts. Factory orders are expected to come out at -4%. A more negative number is bad for the dollar, and a more positive number is good for the dollar.
5. Tuesday, December 5th, 2006 (5:30 pm New York Time) AUSTRALIA
We have Australian interest rate statement. Expectations is unchanged rate of 6.25%. Of course if a rate hike to 6.50% or higher, it's a possibly long on AUD/USD. And a rate cut to 6% is a possibly short on AUD/USD, but the chances of either way rate deviations are pretty much at zero. You can trade the rate decision if you believe in the impossible :) I'll be watching it, and will be focusing on the comments at the time of the rate hike. If there are hints towards more rate hikes, I may possible go long on AUD/USD. If there are hints towards rate cuts, then I will go short on AUD/USD, but I highly doubt that it would happen.
6. Tuesday, December 5th, 2006 (7:30 pm New York Time) AUSTRALIA
We have Australian GDP coming out for the 3rd quarter. It's expected to come out at around 0.5%. A reading of 0.2% or lower would be the lowest reading in over 2 years, so I may possibly go short on AUD/USD. A reading of 0.8% or above would be the highest reading in over a year, so I may possibly go long on AUD/USD. If your broker has fixed spreads on AUD/NZD, then I suggest trading the AUD/NZD pair, because it will probably give you twice bigger range. We'll probably get only about 25-30 pips on the AUD/USD, if my trigger gets hit, on the other hand, AUD/NZD would probably get at least 45-50 pips.
We have Services PMI coming out of UK. Services indicators are not as important as manufacturing indicators, because services is a much more stable industry. Whether the economy is doing good or bad, you still need to go to the doctor, or use accountant, or lawyer, et cetera. So the market doesn't care much about services indicators, however if there is a surprise, there is usually a short term reaction to it. Most economists expect this number to come out between 58 and 59. If it comes out at 60 or above, I may possibly go long on GBP/USD. If it comes out at 56.9 or below, I may possibly go short on GBP/USD. This trade should be good for about 30 pips if my triggers are hit...assuming that the price is not near some strong levels right before the release.
2. Tuesday, December 5th, 2006 (8:30 am New York Time) USA
We have Non-Farm Productivity and Unit Labor Cost coming out of the U.S. This report is not that hot, but may create a move of around 30 pips in the GBP/USD pair if the deviation is significant. It's a report for 3rd quarter, and the expectations is that it will come out at around 0.5%. If it comes out at 0% or negative, that would be bad for the dollar, so I may possibly go long on GBP/USD. If it comes out at 1% or higher, that would be good for the dollar, so I may possibly go short on GBP/USD. Again, this is a very short term trade.
3. Tuesday, December 5th, 2006 (9:00 am New York Time) CANADA
We have interest rate statement coming out of Canada. It's expected that Canada will keep the rates unchanged at 4.25%. If they drop rates to 4%, I may possibly go long on USD/CAD. If they raise rates to 4.5%, I may possibly go short on USD/CAD. These scenarios are extremely unlucky, especially a rate hike, so the main focus will be the comments out of Bank of Canada at the moment of decision. If they say that they are planning to do a rate cut next year, I may possibly go long on USD/CAD.
4. Tuesday, December 5th, 2006 (10:00 am New York Time) USA
We have U.S. non-manufacturing index coming out of the U.S. Another not so strong report that measures services. It's really nothing compared to the manufacturing report we had last Friday. Expectations that it will come out at around 55 or so. If it comes out at 58 or higher, I may possibly go short on GBP/USD. If it comes out at 52 or lower, I may possibly go long on GBP/USD. We'll be lucky to get a 30 pips move out of this report. 20-25 pips is a more realistic expectation, so plan accordingly. I'll take into consideration the other reports before this trade, and watch out for factory orders conflicts. Factory orders are expected to come out at -4%. A more negative number is bad for the dollar, and a more positive number is good for the dollar.
5. Tuesday, December 5th, 2006 (5:30 pm New York Time) AUSTRALIA
We have Australian interest rate statement. Expectations is unchanged rate of 6.25%. Of course if a rate hike to 6.50% or higher, it's a possibly long on AUD/USD. And a rate cut to 6% is a possibly short on AUD/USD, but the chances of either way rate deviations are pretty much at zero. You can trade the rate decision if you believe in the impossible :) I'll be watching it, and will be focusing on the comments at the time of the rate hike. If there are hints towards more rate hikes, I may possible go long on AUD/USD. If there are hints towards rate cuts, then I will go short on AUD/USD, but I highly doubt that it would happen.
6. Tuesday, December 5th, 2006 (7:30 pm New York Time) AUSTRALIA
We have Australian GDP coming out for the 3rd quarter. It's expected to come out at around 0.5%. A reading of 0.2% or lower would be the lowest reading in over 2 years, so I may possibly go short on AUD/USD. A reading of 0.8% or above would be the highest reading in over a year, so I may possibly go long on AUD/USD. If your broker has fixed spreads on AUD/NZD, then I suggest trading the AUD/NZD pair, because it will probably give you twice bigger range. We'll probably get only about 25-30 pips on the AUD/USD, if my trigger gets hit, on the other hand, AUD/NZD would probably get at least 45-50 pips.
posted by Naveen Pantera at 8:36 AM
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