FX Trading Signals for Mar 09

1. Friday, March 9th, 2007 (4:30 am New York Time) UK
We have UK Industrial Production coming up. Industrial Production measures both manufacturing and mining activity in the UK. It's expected to come out at 0.2%. Do you want really safe triggers? I believe that if Industrial Production comes out at 0.6% or higher, it would probably be good for the pound, and GBP/USD may possibly increase by 50 pips or more. If it comes out at -0.2% or more negative, it would probably be bad for the pound, so GBP/USD may possibly decrease by 50 pips or more. There maybe a nice retracement opportunity for after spike trade on this one. You may want to try to shoot for an entry within 15 pips of the pre-release price, 20 pips max. I may personally trade with a less conservative trigger, but if you are inexperienced and trading by yourself, I suggest the triggers above.

2. Friday, March 9th, 2007 (7:00 am New York Time) CANADA
We have Canadian Employment Report coming up. It's expected to come up at around 5K or so. Canadian employment market has been particularly bullish...nobody knows why :) Most other sectors of the economy are suffering, including GDP. Nobody can figure out where the jobs are coming from. If you want safe triggers...I would say a reading of 50K or higher would probably be good for the Canadian dollar, and USD/CAD may possibly go down by 50 pips or more. If the reading is at -50K or more negative, USD/CAD may possibly go up by 50 pips or more. Be aware of any conflicting revisions of more than 20K, and be aware of unemployment rate that's expected at 6.2. If unemployment rate conflicts by even 0.1%, I would be extra careful, because the reading of 6.1 would match the lowest reading in many years. If you miss the initial spike, I wouldn't chase this trade. Usually, it makes 90% of its move in the first 15 seconds, and usually doesn't retrace much, and doesn't go down much lower than the initial spike.

3. Friday, March 9th, 2007 (8:30 am New York Time) USA
Then we have US Non-Farm payroll coming out, together with Trade Balance. I wouldn't worry about trade balance too much...that report is a real dog...if it conflicts, it may simply be an opportunity to enter after spike in the right direction of Non-Farm. Non-Farm payroll is expected at 95K. If you want a nice conservative trade, I would say that if non-farm comes out at 165K or higher, it would be good for the dollar, and GBP/USD may possibly decrease by 80 to 120 pips or more. If it comes out at 25K or lower, GBP/USD may possibly increase by 80 to 120 pips or more, since it would be bad for the dollar. Price levels before this report may be important, so watch out for strong support and resistance levels. Definitely watch for revisions on Non-Farm payroll, and watch out for unemployment rate, that's expected at 4.6%. If unemployment rate conflicts by 0.2% or more, and/or revisions conflict by more than 20K, I would be extremely careful...

BoE on Hold, ECB hikes and Trichet's dovish comments

BOE KEPTS ITS INTEREST RATE UNCHANGED AT 5.25%.

ECB HIKED ITS INTEREST RATE BY 252BP TO 3.75% FROM 3.5% AND WE SAW THE DOVISH COMMENTS ROM ECB PRESIDENT TRICHED WHERE HE DID NOT USE THE WORD LIKE "STRONG VIGILANCE" AND "INTEREST RATE ARE STILL LOW". AND HE SAID THAT ECB WILL BE WATCHING INFLATION VERY CLOSELY.

Currency Focus

USD - The Beige Book revealed that some Fed districts had noted a slowing in activity, but this was not that major and is unlikely to significantly alter the Fed’s overall view of the economy. The report also noted some signs of stabilisation in the housing market and unchanged price pressures.

CAD - The Bank of Canada kept its key interest rate unchanged at 4.25% for a sixth meeting and signaled policy makers are not leaning toward a rate cut or hike soon. “Despite recent volatility in global financial markets, the Bank continues to judge that the risks to its inflation projection are roughly balanced.

EUR - Trichet comments are saying that ECB is pretty much dovish after hiking the 25bps to 3.75%. In his sppech he did not said anything like "strong vigilance" or "our interest are still low". This itself saying that Trichet comments is dovish. And he said that he'll be watching inflation very closely.

FX Trading Signal for Mar 08

1. Thursday, March 8th, 2007 (7:00 am New York Time) UK
We have UK interest rate statement coming out. About 85% of economists think that it will come out same as last month at 5.25%. There are still 15% of economists that are expecting a hike to 5.50%. If the UK hikes the rate, it would probably be good for the pound, and GBP/USD may increase 100 to 150 pips. UK won't probably cut the rates, they have absolutely no reason to do that. But of course as always, if rate is cut to 5%, it would probably be bad for the pound, and GBP/USD may decrease by 100 to 150 pips or more. If they keep the rates unchanged, then it would be a no trade. If for some reason there is a hike, and you can't get in before the spike, I would wait for approximately 40% retracement and get in then.

2. Thursday, March 8th, 2007 (7:45 am New York Time) E-12
Then we have Euro Zone interest rate statement, that's unanimously expected to be hiked to 3.75% from previous 3.50%. If for some reason the rate stays the same at 3.50% or is cut to 3.25%, it would probably be bad for the Euro, and EUR/USD may possibly decrease 80 to 120 pips or more. If the rate is hiked to 4.00%, it would probably be good for the Euro, and EUR/USD may possibly increase by 80 to 120 pips or more.

3. Thursday, March 8th, 2007 (8:30 am New York Time) E-12
Then we have Trichet speaking out of the Euro Zone. Unless you will be with me in the forexdiamonds.com room, or if you are an experienced trader, I don't suggest trading this speech, because it may cause crazy whipsaw action. But in general terms, if Trichet is hinting towards high inflation and more future hikes, EUR/USD may possibly increase by 30 to 50 pips or more. If Trichet is dovish, and is talking about slow inflation, and no hikes, EUR/USD may possibly decrease by 30 to 50 pips or more.

GBP/CAD - 60MIN CHART

GBP/CAD
A BREAKOUT EXPECTED...

This pair is on the verge of breakout, which is resisting for the last 4 days or so. The level that i'm talking about is 2.2750/75, and it found great bottom at 2.2645. Looking into 60min chart here i feel it looks similar to possible inverse head and shoulders and the neckline is placed at above mentioned resistence. Once the 2.2750/75 is taken out then it'll head towards 2.2900 level. And if 2.2645 is taken out then HNS pattern will demolished and it'l test the low of 2.2590.

FX Trading Signals for Mar 07

1. Wednesday, March 7th, 2007 (8:15 am New York Time) USA
We have ADP Employment Report coming out of the US. It's expected to come out at 100K or so. If the number comes out at 180K or higher, it would probably be good for the dollar, and GBP/USD may possibly decrease by around 30 to 40 pips. If the report comes out at 20K or lower, it would probably be bad for the dollar, so GBP/USD may possibly increase by around 30 to 40 pips. Remember, ADP employment will be scrutinized in order to receive clues of where the Non-Farm payroll will come out, though this report has been losing its reputation as a predictor of Non-Farm payroll, because few times, it came out completely off base. If you can't get into this trade within 10 pips of the pre-release price, I would suggest just skipping it. Chasing this report is probably not a very good idea, because it has a tendency to quickly spike up or down, and then retrace. Market sentiment prior to this report would be crucial.

2. Wednesday, March 7th, 2007 (3:00 pm New York Time) New Zealand
Then we have interest rate statement coming out of New Zealand. It is expected to come out at 7.50%, so they are expecting a rate hike out of bank of New Zealand. If it comes out at 7.50%, it will probably have a reverse effect on the New Zealand dollar, since this hike is expected and priced in, when the interest rate is announced, I think Bollard will say something about that they are not going to be raising rate in the near future, and it will probably drive New Zealand dollar down, rather than up. So...if for some weird reason, New Zealand raises the rate to 7.75% or higher, it would probably be good for the New Zealand dollar, and NZD/USD might go up by 80 to 100 pips or more. If there is no rate hike, and it stays unchanged at 7.25%, it would probably be bad for New Zealand dollar, and NZD/USD may possibly decrease by around 50 pips or more. Remember...there may be comments accomodating the statement, and the sentiment of the comments may completely change the direction of the price, so be careful on this one.

JPY - RIDING HIGHER AGAINST ALL MAJORS

JPY trading stronger against GBP at just below 228 after making the low of 227, nearly we saw a 1000 pips fall in this pair (GBP/JPY). Against EUR its trading above 154 and its weaker by nearly 500 pips against JPY. Against the USD trading just above 117 after makng 116.75 as the new low for the near term. Still JPY looking strong against all thee three majors. Well against te CAD, JPY is threatening to go below the 100 levels and against high yield currencies like AUD and NZD its still tading stonger.