Forex Trading Signal 01/23/08

Crazy Cat

Former FPA Special Consultant
This is Sir Pips.

If you wish to watch the video, just click on it, and then click on "play" icon. My video version is MUCH MORE detailed so I encourage you to watch it.

HI-res.: 01-23-2008-full.swf

Let's first review what happened earlier today.

Well, that was a crazy day. We cannot talk about the Forex market without at least mentioning amazing equity moves. The market is really in panic mode right now, and we even got an emergency Fed rate cut today. It happened at 8:20 a.m. New York time, and they cut the rates by 75 bp (0.75%). Some people even expect another rate cut next week, at least another 25 bp if not 50 bp. This totally invalidated the retail sales number. The USD/CAD moved more because of carry trades than because of the report although the number came out quite high. Because of the unexpected U.S. rates cut, some people even expected Canada to cut the rates by 50 bp instead of 25 bp. Retail sales moved the CAD 40 pips but the speculation about possible 50 bp cut on Canadian interest rate moved the market even more the other way. Canada did cut their rates but only by 25 bp, disappointing the speculators.

Due to unexpected rate cut in the U.S., we saw amazing price actions on GBP/JPY as well as on EUR/USD. In fact, we took a trade in the Diamonds room on EUR/USD.

I could write more and more about this but actually Sir Pips did an amazing job with his video that I just strongly recommend you to watch as you can see charts and hear him speaking. I try to keep the text short to minimum as most people want to find a quick information what happened and what will happen the next day. For your convenience and enjoyment, in addition to the YouTube version I also generate and post a high quality video where you can see charts crystal clear. Again, I strongly encourage you to watch that video as it better describes what happened earlier today, and is much more detailed as well. Let me repeat it again, the video is just FANTASTIC! Hint: watch the Hi-quality version as it is even longer than the YouTube version (12 minutes versus 10 minutes).

Then we had Australian CPI coming out. The Trimmed Mean CPI q/q came out a little higher but not enough to give a tradable signal. For more information, watch the video - you will not regret.

Let's better talk about tomorrow.

1. Wednesday, January 23rd, 2008 (4:30 a.m. New York Time) UK
At 4:30 a.m. we are going to have UK GDP as well as BOE Minutes. Because M. King spoke today at 3.10 and said enough about inflation like it may be over 3%, a lot of people think they will not do an emergency cut, implying they are going to cut but not an emergency cut. This makes the Minutes a little less important than usually it is. However, if they vote 9-0 to hold the rates steady on January 10, that would be bullish for the British pound, and if they voted 5-4, then it would be weakening for the pound. We will also have the GDP indicator at the same time. Last time the BOE Minutes dominated; this time, I think, the GDP may be more important. However, you have to look at the whole picture and try to get a good sense what is going on. Even 0.1 trigger is significant on the advanced GDP out of the UK but to be safe due to BOE Minutes coming out at the same time, I would trade 0.2 trigger. If the GDP q/q comes out at 0.7% or higher, we should see GBP/USD going up by 40 to 50 pips (assuming there is no conflict with the BOE Minutes), and it if comes out at 0.3% or lower, that would be weakening the GBP/USD, and it should drop by 40 to 50 pips in the first hour (if there is no conflict).

2. Wednesday, January 23rd, 2008 (3:00 p.m. New York Time) NEW ZEALAND
At 3:00 p.m. we are going to have New Zealand Interest Rate statement. They are expected to keep the rates steady at 8.25%. If they cut the rates, you can sell NZD/USD and look for 50 to 70 pips price action. If the price drops a lot before the report, you may consider buying NZD/USD if there is no cut, and I would take quick 20 pips only. If they hike the rates, then of course you can buy NZD/USD, and expect 50 to 70 pips price action. The real potential is if they either hike or cut, no change can be tradable only if there is a big down move right before the report.

That's all for today.

If news trading seems to be very interesting for you, then I suggest you to go to Forex Diamonds - News Trading Education and read everything about this service. It is a live trading service I provide with Felix, and I will be able to show you exactly what I am doing as I am leading hundreds of traders just like you every day with very clear strategies on when to get in and get out. As people are following my trades, they are learning how to trade the news, feel comfortable with trading and make good profits. We offer 21 days free trial so you can just try it and see how you like it.

Thank you very much, and good luck with your trades.

To Our Success!
-Sir Pipsalot

The video with the signal is recorded by Sir Pipsalot and processed and posted by Crazy Cat.
For your convenience, this text is written based on the video by Crazy Cat.
Please enjoy!
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