Forex Trading Signal 04/29/09

Hey folks,

Here is the video:
04-29-2009.swf

Tuesday saw a big rumor of higher Consumer Confidence figures get proven right, please watch the video for further analysis of that. the EUR/USD seems to be wavering around within it's down channel, so sells in the 1.3250 to 1.3300 range look like a good opportunity for today, but be aware we may see some heightened risk appetite in anticipation of a rosy FOMC interest statement, especially if GDP comes out a bit better than expected. Gold also looks like a good short anywhere from 900 to 912 with a convincing rally through 918 as a good mental stop. Stocks continue to consolidate but seem to be running out of steam. We might have one last blowout rally left IF we get good news today, but if not... look out below. For the news on Wednesday:

0830 US GDP Annualized q/q Advance (consensus somewhere from -4.7 to -4.9%) - I think we could see a nice clean trade off this one in either direction, but on the sell side be wary in case traders feverishly buy a nice dip in anticipation of the FOMC.
If it comes out at -5.4% or lower, EUR/JPY should sell off by 50 pips.
If it comes out at -4.3% or higher, EUR/JPY should rally by 50 pips.

1415 US FOMC Interest Rate Decision/Statement (Expected to possibly cut rates from 0.25% to 0.13% and/or announce some new measures such as an expansion of MBS purchases to stimulate the economy) - As I mention in the video, the markets are eagerly expecting some form of juicy news from the FOMC this week. A cut to 0.13%, new unconventional measures... something... anything... Because of this we may see some risk appetite buying in advance of this announcement.
--If we do see people loading up long, and they do cut rates or push out a big new accomodative program or expand the scope of a current program or something, we will likely see a sharp spike up in EUR/JPY, but the profit taking afterwards will likely cause it to reverse, so I would likely look for some sort of reversal sell after the rally as long as the announcement isn't Earth-shattering.
--If there is no pre-news buying pressure during the European or NY sessions, then I would trade the news straight up and buy EUR/JPY on good accomodative news or an interest rate cut
--No matter what the setup, if there is no cut and no groundbreaking new programs or expansions, the markets will be disappointed and EUR/JPY should be a good sell.
--Lastly, if the Fed pulls a 180 and starts to express more immediate concern about inflation and withdrawing liquidity, that will create VERY strong selling pressure as that is the first step towards removing accomodation and that should be a clear EUR/JPY selling opportunity.

1700 NZ Interest Rates (expected 0.50% cut to 2.50%) - I think the only clear trade here is if they cut by more than expected. I'd feel too uncomfortable buying on a smaller cut:
If they cut by 0.75% or more, NZD/USD should sell off by 50 pips or more.

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