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Forex Trading Signal 01/08/09

Discussion in 'Current Forex Trading Signals' started by Crazy Cat, Jan 8, 2009.

  1. Crazy Cat

    Crazy Cat Former FPA Special Consultant

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    Hi there my Forex friend :)

    Sorry folks for the last signal, I was enjoying some time out in the city with some friends and things ran a lot later than I thought. As for yesterday, MASSIVE job losses hit the ADP number hard and caused intial USD weakness, but like I tried to tell people in the Diamonds room and in the video yesterday (I think), really bad US economic news most likely will NOT cause the USD to lose strength in the long term... it's only a short term knee jerk. The safer trades for really bad news are risk aversion trades like the yen crosses short, short the stock market, long on bonds, short on commodities, etc. We got short on the USD/JPY along with the news and made some decent pips there on a scalp, but we also hit a major daily chart fib and a trendline around 1.3740 on the EUR/USD after the report and exhausted out there, so we called another excellent trade short on the EU for a swing trade and/or position trade and that is working quite nicely. Remember I talked about the FOMC minutes released hinting at massive protracted job losses, so any confirmation of that out of the ADP or Initial Jobless Claims would likely push the markets into a tailspin in advance of Friday's nonfarm payroll figures. Well, that's exactly what happened with the huge -693K ADP release. I expect further stock weakness and risk aversion currency flows to continue until Friday's session. My gut tells me most of the losses will come in advance of NFP, and profits will be taken after the release causing a reversal or at least a funky whipsaw.

    Tomorrow we have 2 pieces of economic news to focus on:

    0700 UK Interest Rate Decision; the official consensus is a 0.50% cut to 1.50%, but the real consensus is somewhere between 0.50% cut and 0.75% cut.
    If they cut rates by 1.00% or more, we should see initial weakness in the GBP/USD and GBP/JPY by 40 pips or so, followed by a sharp turn around upwards.
    If they cut rates by 0.25% or less, we should see initial strength on GBP/USD by 20-50 pips or so, followed by a sharp reversal downwards.
    If they release a statement, the language will also play a key factor in the direction and magnitude of the move.

    0830 US Initial Jobless Claims; 545K expected, I think people are going to be expecting something a little worse, so...
    If it comes out at 600K or higher, that should be enough to short USD/JPY for 40-50 pips to the downside.
    If it comes out at 520K or lower, that should be reassuring for USD/JPY and be good for 40 pips upwards.

    That's it for tomorrow's news. I'm sorry I got back late and didn't have time for a video tonight as I have a lot to say, but I'll try to put it all together for you guys in tomorrow's video which I'll attempt to get out earlier than usual.

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  2. Mark Harding

    Mark Harding Corporal

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    out of eu long at be, all flat at the moment.
     
  3. Yan Qing Chen

    Yan Qing Chen Private

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    Gotta Short Gbpusd, Long Eurgbp, Long Eurusd Right Now!!!!!! LoL :)

    After the lame British interest rate cut and the speech I can totally see EURGBP going to 1.03 or above. Don't get me wrong, I don't mean that EURUSD won't be going to 1.00 as sir pip has been calling. In fact I've been feeling it since September last year. However, I just think that EURGBP will go to 1.0 before EURUSD go to one. Eventually both EURGBP and EURUSD will be near 1 at the end of the year in my opinion. So before EURGBP goes to 1.0 I still prefer to Long EURUSD.
     
    #3 Yan Qing Chen, Jan 8, 2009
    Last edited: Jan 8, 2009

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