Sir Pipsalot
Former FPA Special Consultant
- Messages
- 511
Hey folks,
Good to be back after taking a couple days off for the holiday. Anyhow, late last week we saw some turmoil in the markets stemming from credit default concerns out of Dubai. From my perspective, there was a sharp knee-jerk reaction to that development, but the substance there is lacking and it looks like the markets are going to try to shrug that news off here on Monday. It's also possible that the risk aversion could find other excuses to continue. The next break of recent highs or lows early this week is likely to set the tone for the next 1-2 weeks particularly in stocks.
For now, I think a decent trade may be to get in short on the EUR/USD here in the 1.5050-1.5070 range. We've traded into the area of the 78% retracement of last week's selloff, and if we're going to continue lower, we're not likely to see much more of a rally than this. We're just well positioned for a short here that could have a 30-60 pip SL with a 120+ pip ultimate TP.
On stocks, we need to keenly eye the highs and lows from last week as I mentioned. A break of either should have follow-through repricussions that I'll analyze and discuss when it happens.
In news Monday, the NY session releases of CAD GDP and Chicago PMI are unlikely to yield great opportunities, but there are 2 asian session releases worth looking at:
2000 Chinese Manufacturing PMI (56 expected) - Usually a decent surprise on Chinese data can set the tone on the asian session and it's impact may last for 2-3 hours. Usually I'd recommend trading AUD/JPY for this, but with AU Interest rates 2 1/2 hours later, I'd trade EUR/JPY.
If it comes out at 57 or higher, EUR/JPY may be good for a 2 hour swing trade long looking for 40-80 pips.
If it comes out at 55 or lower, EUR/JPY may be good for a 2 hour swing trade short looking for 40-80 pips.
2230 AU Interest Rates (0.25% hike to 3.75% expected) - Right now 13 out of 14 economists are expecting a hike, while the markets are pricing in about a 55-70% chance of a hike. Obviously the better opportunities are on an unchanged or 0.50% hike outcome, but there may be a bit of bullishness on the AUD following a hike as expected.
If they hike 0.50% to 4.00%, AUD/USD should rally 50-100+ pips.
If they keep rates unchanged at 3.50%, AUD/USD should fall 30-80 pips.
That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.
To our success!
Sir Pipsalot
Good to be back after taking a couple days off for the holiday. Anyhow, late last week we saw some turmoil in the markets stemming from credit default concerns out of Dubai. From my perspective, there was a sharp knee-jerk reaction to that development, but the substance there is lacking and it looks like the markets are going to try to shrug that news off here on Monday. It's also possible that the risk aversion could find other excuses to continue. The next break of recent highs or lows early this week is likely to set the tone for the next 1-2 weeks particularly in stocks.
For now, I think a decent trade may be to get in short on the EUR/USD here in the 1.5050-1.5070 range. We've traded into the area of the 78% retracement of last week's selloff, and if we're going to continue lower, we're not likely to see much more of a rally than this. We're just well positioned for a short here that could have a 30-60 pip SL with a 120+ pip ultimate TP.
On stocks, we need to keenly eye the highs and lows from last week as I mentioned. A break of either should have follow-through repricussions that I'll analyze and discuss when it happens.
In news Monday, the NY session releases of CAD GDP and Chicago PMI are unlikely to yield great opportunities, but there are 2 asian session releases worth looking at:
2000 Chinese Manufacturing PMI (56 expected) - Usually a decent surprise on Chinese data can set the tone on the asian session and it's impact may last for 2-3 hours. Usually I'd recommend trading AUD/JPY for this, but with AU Interest rates 2 1/2 hours later, I'd trade EUR/JPY.
If it comes out at 57 or higher, EUR/JPY may be good for a 2 hour swing trade long looking for 40-80 pips.
If it comes out at 55 or lower, EUR/JPY may be good for a 2 hour swing trade short looking for 40-80 pips.
2230 AU Interest Rates (0.25% hike to 3.75% expected) - Right now 13 out of 14 economists are expecting a hike, while the markets are pricing in about a 55-70% chance of a hike. Obviously the better opportunities are on an unchanged or 0.50% hike outcome, but there may be a bit of bullishness on the AUD following a hike as expected.
If they hike 0.50% to 4.00%, AUD/USD should rally 50-100+ pips.
If they keep rates unchanged at 3.50%, AUD/USD should fall 30-80 pips.
That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.
To our success!
Sir Pipsalot
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