Hey Folks,
We saw some profit taking on stocks and risk related currencies Tuesday as markets worked down off of channel resistance extremes. The EUR/USD sell near the previous day's highs that I recommended yesterday worked very well selling off 180 pips from the double top. Stocks did not sell off a ton, but spent most of the day in negative territory and the futures are getting beat up as jitters circulate in anticipation of the stress test results release on Thursday. Chances are today on Wednesday, we'll have a jittery day in anticipation of that news with either choppy range-bound trading, or some continued pullbacks lower. Because of this, I'd recommend selling rallies today on EUR/USD, GBP/USD, EUR/JPY, and stocks so that you can benefit from either further bearish price action, or at least getting in short near the top of the range. Gold burst through channel resistance, but failed to clear that 919 hurdle and has since sold off. Because of this, I'm still holding shorter term short, but obviously it's not as high probability of a sell as it was before the channel boundary was violated. It's quite possible that stress test financial market jitters could make gold seem attractive over the next day or two and violate a few more technicals along the way, but it could go either way so be careful there. For news Wednesday:
0430 UK Services PMI (46.3 expected) - This indicator performed very well last month and should do well in the current market environment. Sometimes the price action takes a bit (10-20 minutes) to build up steam, so I'd take a more patient trade on this one.
If it comes out at 47.3 or higher, GBP/USD should rise by 40+ pips
If it comes out at 45.3 or lower, GBP/USD should fall by 40+ pips
0815 US ADP Employment Change (-645 expected) - This indicator is losing tradability because a lot of analysts are slamming employment figures as "lagging" and not as valuable as other numbers out there. Because of this, the ADP hasn't been trading very well with more nominal deviations, so we'll look for a very large surpise here to get us in.
If it comes out at -499 or higher, EUR/JPY should rally by 50 pips or more.
If it comes out at -800 or lower, EUR/JPY should sell off by 50 pips or more.
18:45 NZ Employment q/q (-1.0% expected) - Even on a big surprise, this will probably only move 20-30 pips right away, and have some follow through later on.
If it comes out at 0.0% or higher, NZD/USD should rally by 30 pips
If it comes out at -2.0% or lower, NZD/USD should fall by 30 pips
2130 AU Employment Change m/m (-25K expected) - For this trade it's important that the Unemployment Rate agree with the employment surprise. You want worse (higher) unemployment rate to go along with a big negative Employment Change number, and a better (lower) unemployment rate to accompany a less negative or positive Employment Change number. Unemployment is expected at 5.9%.
If it comes out at 0.0 or higher (positive) and the Unemployment rate is 5.8% or lower, AUD/USD should rise by 40 pips.
If it comes out at -50K or lower and the Unemployment rate is 6.0% or higher, AUD/USD should fall by 40 pips.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
We saw some profit taking on stocks and risk related currencies Tuesday as markets worked down off of channel resistance extremes. The EUR/USD sell near the previous day's highs that I recommended yesterday worked very well selling off 180 pips from the double top. Stocks did not sell off a ton, but spent most of the day in negative territory and the futures are getting beat up as jitters circulate in anticipation of the stress test results release on Thursday. Chances are today on Wednesday, we'll have a jittery day in anticipation of that news with either choppy range-bound trading, or some continued pullbacks lower. Because of this, I'd recommend selling rallies today on EUR/USD, GBP/USD, EUR/JPY, and stocks so that you can benefit from either further bearish price action, or at least getting in short near the top of the range. Gold burst through channel resistance, but failed to clear that 919 hurdle and has since sold off. Because of this, I'm still holding shorter term short, but obviously it's not as high probability of a sell as it was before the channel boundary was violated. It's quite possible that stress test financial market jitters could make gold seem attractive over the next day or two and violate a few more technicals along the way, but it could go either way so be careful there. For news Wednesday:
0430 UK Services PMI (46.3 expected) - This indicator performed very well last month and should do well in the current market environment. Sometimes the price action takes a bit (10-20 minutes) to build up steam, so I'd take a more patient trade on this one.
If it comes out at 47.3 or higher, GBP/USD should rise by 40+ pips
If it comes out at 45.3 or lower, GBP/USD should fall by 40+ pips
0815 US ADP Employment Change (-645 expected) - This indicator is losing tradability because a lot of analysts are slamming employment figures as "lagging" and not as valuable as other numbers out there. Because of this, the ADP hasn't been trading very well with more nominal deviations, so we'll look for a very large surpise here to get us in.
If it comes out at -499 or higher, EUR/JPY should rally by 50 pips or more.
If it comes out at -800 or lower, EUR/JPY should sell off by 50 pips or more.
18:45 NZ Employment q/q (-1.0% expected) - Even on a big surprise, this will probably only move 20-30 pips right away, and have some follow through later on.
If it comes out at 0.0% or higher, NZD/USD should rally by 30 pips
If it comes out at -2.0% or lower, NZD/USD should fall by 30 pips
2130 AU Employment Change m/m (-25K expected) - For this trade it's important that the Unemployment Rate agree with the employment surprise. You want worse (higher) unemployment rate to go along with a big negative Employment Change number, and a better (lower) unemployment rate to accompany a less negative or positive Employment Change number. Unemployment is expected at 5.9%.
If it comes out at 0.0 or higher (positive) and the Unemployment rate is 5.8% or lower, AUD/USD should rise by 40 pips.
If it comes out at -50K or lower and the Unemployment rate is 6.0% or higher, AUD/USD should fall by 40 pips.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot