FX Trading Signals for Jan 03
So yesterday, the manufacturing PMI came out lower than expected. Probably because of the extreme pound strength, it's not giving the manufacturers of UK more hope. Staying out of the markets yesterday on this report was a very smart decision in my opinion. As you probably remember, the pound gained a lot of ground before the report, and when the manufacturing PMI was released below expectations, with the 2nd lowest reading in a year, it didn't do much, it caused a very small spike down, and the GBP/USD bounced back up and rallied some more.
Okay, let's talk about today, in terms of fundamentals. We have three tradable reports tomorrow.
1. Wednesday, January 3rd, 2007 (8:15 am New York Time) USA We have ADP Employment report coming out of the U.S. This report will be heavily scrutinized, because it may give hints about the non-farm payroll report on Friday. The ADP Employment report is expected to come out at approximately 120K. If this report comes out at 180K or more, it would be a positive surprise for the U.S. dollar, so I may possibly go short on GBP/USD. If this report comes out at 60K or less, it would be considered bad for the dollar, so I may possibly go long on GBP/USD.
2. Wednesday, January 3rd, 2007 (10:00 am New York Time) USA Then we have ISM Manufacturing report coming out, which is a very important report that measures manufacturing activity in the U.S. for the month of December. Last month, this report came out extremely low at 49.5. This month, it's expected to come out a bit higher, somewhere between 50 and 50.5, due to the dollar weakness, which benefits the U.S. manufacturing and exports. If this reading shows 49 or lower, it would be bad for the dollar, so I may possibly go long on GBP/USD. If this reading shows 52 or higher, it would be good for the dollar, so I may possibly go short on GBP/USD.
3. Wednesday, January 3rd, 2007 (4:45 pm New York Time) New Zealand Then we have New Zealand Trade Balance coming out, which is expected at -0.85 billion. If it comes out at -1.3 billion or more negative, it would be bad for the New Zealand dollar, so I may possibly go short on NZD/USD. If it comes out at -0.5 billion or less negative, it would be good for the New Zealand dollar, so I may possibly go long on NZD/USD. You can also trade other pairs on this, like AUD/NZD. If you choose to trade AUD/NZD, you have to do everything opposite to NZD/USD. AUD/NZD tends to have a move of at least 1.5 times bigger than NZD/USD.
Okay, let's talk about today, in terms of fundamentals. We have three tradable reports tomorrow.
1. Wednesday, January 3rd, 2007 (8:15 am New York Time) USA We have ADP Employment report coming out of the U.S. This report will be heavily scrutinized, because it may give hints about the non-farm payroll report on Friday. The ADP Employment report is expected to come out at approximately 120K. If this report comes out at 180K or more, it would be a positive surprise for the U.S. dollar, so I may possibly go short on GBP/USD. If this report comes out at 60K or less, it would be considered bad for the dollar, so I may possibly go long on GBP/USD.
2. Wednesday, January 3rd, 2007 (10:00 am New York Time) USA Then we have ISM Manufacturing report coming out, which is a very important report that measures manufacturing activity in the U.S. for the month of December. Last month, this report came out extremely low at 49.5. This month, it's expected to come out a bit higher, somewhere between 50 and 50.5, due to the dollar weakness, which benefits the U.S. manufacturing and exports. If this reading shows 49 or lower, it would be bad for the dollar, so I may possibly go long on GBP/USD. If this reading shows 52 or higher, it would be good for the dollar, so I may possibly go short on GBP/USD.
3. Wednesday, January 3rd, 2007 (4:45 pm New York Time) New Zealand Then we have New Zealand Trade Balance coming out, which is expected at -0.85 billion. If it comes out at -1.3 billion or more negative, it would be bad for the New Zealand dollar, so I may possibly go short on NZD/USD. If it comes out at -0.5 billion or less negative, it would be good for the New Zealand dollar, so I may possibly go long on NZD/USD. You can also trade other pairs on this, like AUD/NZD. If you choose to trade AUD/NZD, you have to do everything opposite to NZD/USD. AUD/NZD tends to have a move of at least 1.5 times bigger than NZD/USD.
posted by Naveen Pantera at 8:59 PM
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