FX Trading Strategy for Dec 01
1. Friday, December 1st, 2006 (4:30 am New York Time) UK
We have UK Manufacturing PMI coming out. Expected number is 54.0 If it comes out at 55.0 or above, I may possibly go long on GBP/USD. Remember, the highest this report came out this year was 55.1, so anything over 55 would be good for the pound in my opinion. On the other hand, if this report comes out at 52.9 or lower, that would be the lowest reading since March of this year, and a strong psychological barrier being broken under 53, so I may possibly go short on GBP/USD.
2. Friday, December 1st, 2006 (7:00 am New York Time) CANADA
We have Canadian employment change coming out. It's expected at 15K. If it comes out at 0 or negative, I may possibly go long on USD/CAD, because it would be bad for the Canadian dollar. On the other hand, if it comes out at 30K or higher, that would be a beacon of hope for the Canadian dollar, after such horrible GDP reading earlier today, and reconfirm strength in the Canadian employment market after super positive number previous month at 50.5K. I will be watching out for Canadian unemployment rate to make sure it doesn't conflict. It really shouldn't, but if for some reason unemployment rate conflicts by even 0.1%, I would exit the trade immediately. So at a 30K or higher reading, I may possibly go short on USD/CAD.
3. Friday, December 1st, 2006 (9:00 am New York Time) USA
Then we have Bernanke speech coming out. Most likely Bernanke will be hawkish again, trying to talk the dollar up. He might even do something ridiculously crazy as mentioning a possibility for another rate hike. He probably won't be dovish, so his speech should be short term good for the dollar. I'll probably be looking for a good entry on GBP/USD short half an hour to fifteen minutes before the speech. It will all depend on what levels the GBP/USD is at before the speech.
4. Friday, December 1st, 2006 (10:00 am New York Time) USA
Then we have manufacturing PMI coming out of the U.S. The market will probably be expecting a lower than expected reading, because some economists believe that Chicago PMI has a direct correlation to this number, and since it came out below 50 earlier today, they will probably be looking for weaker number than the expectation of 51.8. If the number comes out at 53.0 or higher, that should be extremely positive for the dollar, because not only will it come out better than previous month's number, but it would be better than September's number, which was at 52.9. So 53.0 or higher, would signify that I would possibly go short on GBP/USD, and look for a profit of about 40 pips or so...depending on where the pound is at before the report. Just remember, and be aware of those pound bulls if the price gets too low. On the other hand, if the Manufacturing PMI comes out at 50.9 or below, it would break the psychologically strong level of 51.0, and would show the lowest reading since June of 2003. So if it comes out at 50.9 or below, I may possibly go long on GBP/USD, looking to make hopefully at least 40-50 pips, depending on where the pound is at before the report.
We have UK Manufacturing PMI coming out. Expected number is 54.0 If it comes out at 55.0 or above, I may possibly go long on GBP/USD. Remember, the highest this report came out this year was 55.1, so anything over 55 would be good for the pound in my opinion. On the other hand, if this report comes out at 52.9 or lower, that would be the lowest reading since March of this year, and a strong psychological barrier being broken under 53, so I may possibly go short on GBP/USD.
2. Friday, December 1st, 2006 (7:00 am New York Time) CANADA
We have Canadian employment change coming out. It's expected at 15K. If it comes out at 0 or negative, I may possibly go long on USD/CAD, because it would be bad for the Canadian dollar. On the other hand, if it comes out at 30K or higher, that would be a beacon of hope for the Canadian dollar, after such horrible GDP reading earlier today, and reconfirm strength in the Canadian employment market after super positive number previous month at 50.5K. I will be watching out for Canadian unemployment rate to make sure it doesn't conflict. It really shouldn't, but if for some reason unemployment rate conflicts by even 0.1%, I would exit the trade immediately. So at a 30K or higher reading, I may possibly go short on USD/CAD.
3. Friday, December 1st, 2006 (9:00 am New York Time) USA
Then we have Bernanke speech coming out. Most likely Bernanke will be hawkish again, trying to talk the dollar up. He might even do something ridiculously crazy as mentioning a possibility for another rate hike. He probably won't be dovish, so his speech should be short term good for the dollar. I'll probably be looking for a good entry on GBP/USD short half an hour to fifteen minutes before the speech. It will all depend on what levels the GBP/USD is at before the speech.
4. Friday, December 1st, 2006 (10:00 am New York Time) USA
Then we have manufacturing PMI coming out of the U.S. The market will probably be expecting a lower than expected reading, because some economists believe that Chicago PMI has a direct correlation to this number, and since it came out below 50 earlier today, they will probably be looking for weaker number than the expectation of 51.8. If the number comes out at 53.0 or higher, that should be extremely positive for the dollar, because not only will it come out better than previous month's number, but it would be better than September's number, which was at 52.9. So 53.0 or higher, would signify that I would possibly go short on GBP/USD, and look for a profit of about 40 pips or so...depending on where the pound is at before the report. Just remember, and be aware of those pound bulls if the price gets too low. On the other hand, if the Manufacturing PMI comes out at 50.9 or below, it would break the psychologically strong level of 51.0, and would show the lowest reading since June of 2003. So if it comes out at 50.9 or below, I may possibly go long on GBP/USD, looking to make hopefully at least 40-50 pips, depending on where the pound is at before the report.
posted by Naveen Pantera at 11:37 AM
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