Forex Trading Signal 06/17/09

Crazy Cat

Former FPA Special Consultant
Hey folks,

Here is the video:

EUR/USD and GBP/USD continue to range trade within their newfound downtrend despite the common Tuesday bounce, so I continue to advocate either maintaining position trades short there and/or selling at resistance. My thinking is EUR/USD should make a move for the 1.3500 region sometime this week or early next week. Despite my bearish bias, it's a strong possibility even in that scenario we extend with further rangebound consolidation on the hourly charts, which is why I prefer to sell resistance rather than chase momentum short. Gold short side is still holding up rather well and 900 is a good level to take some short term proifts if you see fit, but keep in mind we should continue and see below 700 sometime this year.

Stocks failed to follow the "turn around Tuesday" type bounce action on the currencies and had not only a bearish day, but a bearish sell-off close. Chances are the S&P will work down to psychological 900 support fairly soon, and eventually break into the mid 800's in the next 1-2 weeks.

News on Tuesday saw a buy trigger on a higher than expected UK CPI deliver with a great trade if you bought it at pretty much any point early on. Near signals on German ZEW and US Housing Starts provided short term spikes, but failed to hold on to the gains for long. For Wednesday:

0430 UK Claimant Count Change (60K expected) and BoE Minutes - My research tells me that the BoE minutes has a lot more GBP negative risk than positive risk as comments from some BoE members seem to hint at a desire to expand their quantitative easing measures. I actually recommend getting short GBP/USD sometime 20-45 minutes before the news and try to ride it short. If the statement sparks some bullishness or if the Claimant Count Change comes in at 50K or lower, I would recommend closing the short quickly.

0830 US CPI Core m/m (0.1% expected) - This report can do one of 2 things: spark a broad-based USD move, or fuel a risk appetite/risk aversion move. If we get the first, USD/JPY may be the best pair to trade; however, if we get more of a risk type focus on the news (the more likely scenario), EUR/JPY or GBP/JPY (50-80 pip move likely) will far outperform the USD/JPY (25-40 pip move likely). It's up to you... USD/JPY is the safer bet either way, but EUR/JPY or GBP/JPY could have a lot more profit potential on a signal.
If it comes out at 0.2% or higher AND the other inflation numbers agree, XXX/JPY pairs should rally (see above)
If it comes out at 0.0% or lower AND the other inflation numbers agree, XXX/JPY pairs should sell off (see above)

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