FX Trading Signals for Jan 25
1. Thursday, January 25th, 2007 (4:00 am New York Time) GERMANY
We have German IFO index coming out. We have three numbers coming out. Generally they don't conflict, and the main number is the main German IFO business climate, which is expected at 109. If the number comes out at 110 or higher, it would be the highest reading in many years, and I may possibly go long on EUR/USD. If the number comes out at 106.7 or lower, it would be a big drop from previous reading of 108.7, and it would be below the reading before that at 106.8, so I may possibly go short on EUR/USD. This trade may take 10 to 15 minutes to fully manifest, and I wouldn't expect a move of more than 30 pips on this one.
2. Thursday, January 25th, 2007 (10:00 am New York Time) USA
Then we have Existing Home Sales coming out of the U.S. This is a very steady and accurately calculated indicator, so the deviations from consensus are usually minimal. Expectations are 6.25M, versus 6.28M last month. If the number comes out at 6.5M or higher, that would mean a growth in home sales by a whopping 4%, so it could be good for the dollar, so I may possibly go short on GBP/USD short term. A number of 5.99M or lower would be a huge drop in housing, and would possibly be bad for the dollar, so I may possibly go long on GBP/USD.
3. Thursday, January 25th, 2007 (6:30 pm New York Time) JAPAN
We have CPI figures coming out of Japan. We have ten different numbers coming out, and who knows which one is going to be released first, and which one is going to be released last. The most important number is probably Tokyo CPI, excluding food, which is expected to come out at 0.2%. Trading Japanese reports is very tricky, especially the CPI. A couple of months ago, their CPI was high, which allowed international countries to put pressure on Japan to raise interest rates. So what did the Japanese do? They simply removed some of the items from their CPI basket, which were causing most inflation, so they came up with a new number. So when the number was released, it read extremely low, and in parenthesis, it had the number according to their old standards, which was as expected. Extremely confusing, and if confusing equals risky in trading forex news. So the main focus is Tokyo core CPI, and National Core CPI, and both are expected at 0.2%. If any of these numbers come out at 0.4%, it would mean that the inflation is high, and would put further pressure for Japanese government to hike the rate, and it would be strengthening for the yen. If the reading is at 0% or lower, then a rate hike will probably not come for a while, so it would be weakening for the yen. I personally won't even set up the Secret News Weapon for this trade. I'll just look at the numbers, and act on the first one that I see first, assuming that it gives such big deviation. If you are confused, please stay out of trading this report.
We have German IFO index coming out. We have three numbers coming out. Generally they don't conflict, and the main number is the main German IFO business climate, which is expected at 109. If the number comes out at 110 or higher, it would be the highest reading in many years, and I may possibly go long on EUR/USD. If the number comes out at 106.7 or lower, it would be a big drop from previous reading of 108.7, and it would be below the reading before that at 106.8, so I may possibly go short on EUR/USD. This trade may take 10 to 15 minutes to fully manifest, and I wouldn't expect a move of more than 30 pips on this one.
2. Thursday, January 25th, 2007 (10:00 am New York Time) USA
Then we have Existing Home Sales coming out of the U.S. This is a very steady and accurately calculated indicator, so the deviations from consensus are usually minimal. Expectations are 6.25M, versus 6.28M last month. If the number comes out at 6.5M or higher, that would mean a growth in home sales by a whopping 4%, so it could be good for the dollar, so I may possibly go short on GBP/USD short term. A number of 5.99M or lower would be a huge drop in housing, and would possibly be bad for the dollar, so I may possibly go long on GBP/USD.
3. Thursday, January 25th, 2007 (6:30 pm New York Time) JAPAN
We have CPI figures coming out of Japan. We have ten different numbers coming out, and who knows which one is going to be released first, and which one is going to be released last. The most important number is probably Tokyo CPI, excluding food, which is expected to come out at 0.2%. Trading Japanese reports is very tricky, especially the CPI. A couple of months ago, their CPI was high, which allowed international countries to put pressure on Japan to raise interest rates. So what did the Japanese do? They simply removed some of the items from their CPI basket, which were causing most inflation, so they came up with a new number. So when the number was released, it read extremely low, and in parenthesis, it had the number according to their old standards, which was as expected. Extremely confusing, and if confusing equals risky in trading forex news. So the main focus is Tokyo core CPI, and National Core CPI, and both are expected at 0.2%. If any of these numbers come out at 0.4%, it would mean that the inflation is high, and would put further pressure for Japanese government to hike the rate, and it would be strengthening for the yen. If the reading is at 0% or lower, then a rate hike will probably not come for a while, so it would be weakening for the yen. I personally won't even set up the Secret News Weapon for this trade. I'll just look at the numbers, and act on the first one that I see first, assuming that it gives such big deviation. If you are confused, please stay out of trading this report.
posted by Naveen Pantera at 10:47 AM
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