FX Trading Signals for Dec 12
This is one of the best trading day, here we're going to see whole lot of heavyweight economic data coming out...The only two things that i'll be keenly waiting to trade are CPI from UK and Trade Balance from USA and anything hawkish or dovish stance from US Fed...
1. Tuesday, December 12th, 2006 (4:30 am New York Time) UK
We have CPI coming out of UK. It's a biggie, because it's an inflation measure, and this reading may help the UK government decide whether to do another rate hike or not. My focus will be the monthly headline number, which is expected at around 0.2%. If it comes out at 0.3% or higher, I may possibly go long on GBP/USD. If it comes out at 0.0% or lower, I may possibly go short on GBP/USD. Just watch out for the core yearly number, which is expected at around 1.5%. If the yearly core conflicts by even 0.1%, I would exit my position immediately, and stay out. Reason my short trigger is higher, is because the consensus at 0.1% or 0.2% is very split, however almost nobody is expecting 0%, and nobody is expecting 0.3%. If my triggers are hit without conflicts, we should probably see the pound move by 50 to 120 pips in the first hour of this report.
2. Tuesday, December 12th, 2006 (5:00 am New York Time) GERMANY
We have Zew Economic Sentiment coming out of Germany. This is one of the rare reports out of a E-12 country that actually matters and moves the market consistently. It's expected to come out at -25. If it comes out at -30 or more negative, that would be the lowest reading in many years, if not ever, plus it would be a psychologically bad number being over -30, almost nobody is expecting that, so if it happens, I may possibly go short on EUR/USD. If it comes out at -19 or less negative, I may possibly go long on EUR/USD, because -19 or or less negative would be the highest reading since August, it would be below the psychological -20 level, and would signify a drop of almost 10 points from previous number at -28.5. If my triggers are hit, I expect at least 20 pips move on this one.
3. Wednesday, December 12th, 2006 (8:30 am New York Time) USA
We have U.S. trade balance coming out. It's another biggie. Remember, the more negative the trade balance, the more money flows out of the United States, because it imports more than exports, and that devaluates the dollar by a simple principal of supply and demand. I'd probably want to see a deviation of at least 2 billion to be safe on this one. The expectation is -63 billion, so if it comes out at -65 billion or more negative, it would be bad for the dollar, so I may possibly go long on GBP/USD. If it comes out at -61 billion or or less negative, it would be good for the dollar, so I may possibly go short on GBP/USD.
4. Wednesday, December 12th, 2006 (2:15 pm New York Time) USA
We have FOMC interest rate statement coming out of the U.S. It's widely & unanimously expected that the U.S. will keep the rates unchanged at 5.25%. I mean, this is like 99.99% sure. If for some reason they hike the rate to 5.50%, I may possibly go short on GBP/USD, since it would be good for the dollar, or if they cut the rate to 5.00%, I may possibly go long on GBP/USD, since it would be bad for the dollar. But you probably have a bigger chance of seeing a flying pig tomorrow, than U.S. doing anything with the rates :) It's highly unlikely. What I will be focusing on is the comments after the rate hike. Most likely the comments will be hawkish, stressing the inflation threats. If the Fed says anything directly about another rate hike, I may possibly go short on GBP/USD. If they make a direct comment about cutting rates next year, I may possibly go long on GBP/USD. Unless they make a directly related interest rate comment, I won't be trading this.
1. Tuesday, December 12th, 2006 (4:30 am New York Time) UK
We have CPI coming out of UK. It's a biggie, because it's an inflation measure, and this reading may help the UK government decide whether to do another rate hike or not. My focus will be the monthly headline number, which is expected at around 0.2%. If it comes out at 0.3% or higher, I may possibly go long on GBP/USD. If it comes out at 0.0% or lower, I may possibly go short on GBP/USD. Just watch out for the core yearly number, which is expected at around 1.5%. If the yearly core conflicts by even 0.1%, I would exit my position immediately, and stay out. Reason my short trigger is higher, is because the consensus at 0.1% or 0.2% is very split, however almost nobody is expecting 0%, and nobody is expecting 0.3%. If my triggers are hit without conflicts, we should probably see the pound move by 50 to 120 pips in the first hour of this report.
2. Tuesday, December 12th, 2006 (5:00 am New York Time) GERMANY
We have Zew Economic Sentiment coming out of Germany. This is one of the rare reports out of a E-12 country that actually matters and moves the market consistently. It's expected to come out at -25. If it comes out at -30 or more negative, that would be the lowest reading in many years, if not ever, plus it would be a psychologically bad number being over -30, almost nobody is expecting that, so if it happens, I may possibly go short on EUR/USD. If it comes out at -19 or less negative, I may possibly go long on EUR/USD, because -19 or or less negative would be the highest reading since August, it would be below the psychological -20 level, and would signify a drop of almost 10 points from previous number at -28.5. If my triggers are hit, I expect at least 20 pips move on this one.
3. Wednesday, December 12th, 2006 (8:30 am New York Time) USA
We have U.S. trade balance coming out. It's another biggie. Remember, the more negative the trade balance, the more money flows out of the United States, because it imports more than exports, and that devaluates the dollar by a simple principal of supply and demand. I'd probably want to see a deviation of at least 2 billion to be safe on this one. The expectation is -63 billion, so if it comes out at -65 billion or more negative, it would be bad for the dollar, so I may possibly go long on GBP/USD. If it comes out at -61 billion or or less negative, it would be good for the dollar, so I may possibly go short on GBP/USD.
4. Wednesday, December 12th, 2006 (2:15 pm New York Time) USA
We have FOMC interest rate statement coming out of the U.S. It's widely & unanimously expected that the U.S. will keep the rates unchanged at 5.25%. I mean, this is like 99.99% sure. If for some reason they hike the rate to 5.50%, I may possibly go short on GBP/USD, since it would be good for the dollar, or if they cut the rate to 5.00%, I may possibly go long on GBP/USD, since it would be bad for the dollar. But you probably have a bigger chance of seeing a flying pig tomorrow, than U.S. doing anything with the rates :) It's highly unlikely. What I will be focusing on is the comments after the rate hike. Most likely the comments will be hawkish, stressing the inflation threats. If the Fed says anything directly about another rate hike, I may possibly go short on GBP/USD. If they make a direct comment about cutting rates next year, I may possibly go long on GBP/USD. Unless they make a directly related interest rate comment, I won't be trading this.
posted by Naveen Pantera at 8:52 AM
<< Home