FX Trading Signals for Dec 06
1.Wednesday, December 6th, 2006 (4:30 am New York Time) UK
We have Industrial Production coming out of UK for the month of October. It's expected that the number will show slight growth of 0.1%. A negative number would be bad for the pound, because it would be the first decline since second quarter, on the other hand a number of 0.3% or above would signify the highest reading on this report since March of this year. In May it came out at 0.3%, but it wasn't necessarily considered high, because the month before the reading was at -0.5%. I hope I didn't confuse you with all these numbers :) Let me make it very simple. If the number comes out at -0.1% or more negative, I may possibly go short on GBP/USD. If the number comes out at 0.3% or higher, I may possibly go long on GBP/USD. I am hoping that if my triggers are hit, GBP/USD will move by at least 50 pips. Though it may depend on where the price is at before the report. I would think that a move of at least 30 pips is extremely likely if my triggers are hit. Just watch out for conflicts out of Manufacturing Production, which is expected at 0.2%. Usually the reports don't conflict, because manufacturing production is part of the industrial production.
2. Wednesday, December 6th, 2006 (8:15 am New York Time) USA
We have ADP Employment report coming out. It's supposed to give clues on the non-farm payroll, except ADP, which stands for Automatic Data Processing, samples much smaller part of the labor market. If ADP reads at 175K or above, I may possibly go short on GBP/USD. If it reads at 50K or below, I may possibly go long on GBP/USD. Will be very careful with this report, the move may be short lived. If I don't see any moves in the first minute after this number is released, I will exit.
3. Wednesday, December 6th, 2006 (3:00 pm New York Time) NEW ZEALAND
We have New Zealand interest rate statement coming out, which is expected at 7.25%. New Zealand gave some people hope for another rate hike earlier this year, by saying that "they see no reason to keep the rates unchanged". We were expecting a rate hike back in October, but it didn't happen due to some bad data released out of New Zealand earlier. There is still remains about 5% chance that New Zealand will hike their rate tomorrow, but it's extremely unlikely. If they hike the rate, I may possibly go short on AUD/NZD, and expect a move of about 150-200 pips. If there is no rate hike, which is 95% chance, I will look for some comments after the rate announcement, and if they are hinting of future rate hikes next year, then I may possibly go short on AUD/NZD. If they hint of no plans to do anymore rate hikes, I may possibly go long on AUD/NZD. We'll see...it'll depend as we get closer to this. But if the rate hike happens to be 7.50%, it would probably be a very nice trade on New Zealand Dollar strength, so either a long on NZD/USD or short on AUD/NZD.
4. Wednesday, December 6th, 2006 (7:30 pm New York Time) AUSTRALIA
We have Australian employment report coming out. It's expected to come out at around 10K. If it comes out at 30K or above, I may possibly go long on AUD/USD. If it comes out negative, I may possibly go short on AUD/USD. If these triggers are hit, this trade should be good for about 30 pips on AUD/USD. If you want bigger range, you can trade the AUD/NZD pair. I don't trade it on Australian reports, because my broker widens the spread to 25 pips on that pair, so it becomes too risky. Watch out for unemployment rate conflicts. Unemployment is expected at around 4.7%. If it comes out higher than that, that would be bad, so a conflict on a positive employment change number. If it comes out at 4.6% or lower, it would be a conflict on the negative employment figures number.
We have Industrial Production coming out of UK for the month of October. It's expected that the number will show slight growth of 0.1%. A negative number would be bad for the pound, because it would be the first decline since second quarter, on the other hand a number of 0.3% or above would signify the highest reading on this report since March of this year. In May it came out at 0.3%, but it wasn't necessarily considered high, because the month before the reading was at -0.5%. I hope I didn't confuse you with all these numbers :) Let me make it very simple. If the number comes out at -0.1% or more negative, I may possibly go short on GBP/USD. If the number comes out at 0.3% or higher, I may possibly go long on GBP/USD. I am hoping that if my triggers are hit, GBP/USD will move by at least 50 pips. Though it may depend on where the price is at before the report. I would think that a move of at least 30 pips is extremely likely if my triggers are hit. Just watch out for conflicts out of Manufacturing Production, which is expected at 0.2%. Usually the reports don't conflict, because manufacturing production is part of the industrial production.
2. Wednesday, December 6th, 2006 (8:15 am New York Time) USA
We have ADP Employment report coming out. It's supposed to give clues on the non-farm payroll, except ADP, which stands for Automatic Data Processing, samples much smaller part of the labor market. If ADP reads at 175K or above, I may possibly go short on GBP/USD. If it reads at 50K or below, I may possibly go long on GBP/USD. Will be very careful with this report, the move may be short lived. If I don't see any moves in the first minute after this number is released, I will exit.
3. Wednesday, December 6th, 2006 (3:00 pm New York Time) NEW ZEALAND
We have New Zealand interest rate statement coming out, which is expected at 7.25%. New Zealand gave some people hope for another rate hike earlier this year, by saying that "they see no reason to keep the rates unchanged". We were expecting a rate hike back in October, but it didn't happen due to some bad data released out of New Zealand earlier. There is still remains about 5% chance that New Zealand will hike their rate tomorrow, but it's extremely unlikely. If they hike the rate, I may possibly go short on AUD/NZD, and expect a move of about 150-200 pips. If there is no rate hike, which is 95% chance, I will look for some comments after the rate announcement, and if they are hinting of future rate hikes next year, then I may possibly go short on AUD/NZD. If they hint of no plans to do anymore rate hikes, I may possibly go long on AUD/NZD. We'll see...it'll depend as we get closer to this. But if the rate hike happens to be 7.50%, it would probably be a very nice trade on New Zealand Dollar strength, so either a long on NZD/USD or short on AUD/NZD.
4. Wednesday, December 6th, 2006 (7:30 pm New York Time) AUSTRALIA
We have Australian employment report coming out. It's expected to come out at around 10K. If it comes out at 30K or above, I may possibly go long on AUD/USD. If it comes out negative, I may possibly go short on AUD/USD. If these triggers are hit, this trade should be good for about 30 pips on AUD/USD. If you want bigger range, you can trade the AUD/NZD pair. I don't trade it on Australian reports, because my broker widens the spread to 25 pips on that pair, so it becomes too risky. Watch out for unemployment rate conflicts. Unemployment is expected at around 4.7%. If it comes out higher than that, that would be bad, so a conflict on a positive employment change number. If it comes out at 4.6% or lower, it would be a conflict on the negative employment figures number.
posted by Naveen Pantera at 9:33 AM
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