1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Forex Trading Signal 07/23/09

Discussion in 'Current Forex Trading Signals' started by Crazy Cat, Jul 23, 2009.

  1. Crazy Cat

    Crazy Cat Former FPA Special Consultant

    Joined:
    Sep 30, 2007
    Messages:
    752
    Likes Received:
    0
    Hey folks,

    The markets remain in consolidative limbo as the risk appetite momentum wanes and stocks round off this potential high. We're getting to a point now where the coming 3-6% selloff should start pretty soon, or else we'll have to more strongly consider other possibilities (like the retracement getting replaced by just an extended consolidation triangle or something). Irregardless, the forecast remains the same... a near term decline should take stocks lower to 900-920 (or close) over the next week and it's quite possible the EUR/USD and GBP/USD will make nice complimentary retracements lower in conjunction. The best medium to long term opportunity is to use the retracement lower to load up for a long position trade as stocks gear up for another rally leg into the 1000-1100 range and the EU & GU gun to new highs. Gold and silver will likely swing along with these moves as well, but I prefer to hold Silver short through all of this and add on further retracement above $14 since I only trade gold and silver long term.

    Just to recap from prior signal discussions, the big picture here is that we will likely have a continued rally leg through towards the end of the summer, but around then or the early fall as optimism peaks along with the markets, we should cap off a major high that will lead to considerable declines that should test and likely break the March lows. But this isn't late summer, and we still have some good rallying left in us, so as long as you're following the markets regularly, it's best to position for the long side until we reach optimism extremes along with waning momentum and a more clear 3 wave advance on the weekly chart seemingly complete.

    On news Wednesday, in the BoE minutes, a 9-0 vote to leave the APF unchanged at 125 billion pounds along with some more optimistic language helped to bolster the GBP/USD, but there was enough volatility that we were able to actually make some pips by shorting the highs. More than one way to skin a cat around the news, heh. Canadian Retail Sales (headline) came out high enough to hit our sell trigger, and we got about 25-30 pips quickly followed by a period of choppy retracement and an eventual break much lower without violating the prerelease price... so I'd say that's pretty solid price action for a CAD report. For news Thursday:

    0430 UK Retail Sales m/m (0.3% expected) - This trade was an absolute blockbuster last month, but in today's complicated markets, history has a tough time repeating itself in back to back months, so even though this is one of the better trade opportunities of the month, be careful. We have seen decent deviations cause pure fakeouts this year, so don't let a loss run too hard against you.
    If it comes out at 0.8% or higher, GBP/USD should rally 40 pips or more.
    If it comes out at -0.3% or lower, GBP/USD should sell off 40 pips or more.
    Watch out for strong trends on GU heading into the report. Oftentimes a strong Euro session trend heading into 0430 news will end up reversing no matter which way the news comes out.

    1000 US Existing Home Sales (4.84M expected) - We've only seen small deviations on this one in the last few months, but if we get something more substantial, this trade should see a strong reaction out of EUR/USD. This report has become THE most important housing number of the month; however, reaction is typically small in the first minute, so if it hits the triggers, get in and ride it even if there wasn't a huge pop right away. There's a chance it could get ignored, but the odds are greater it will start to push both stocks and the Euro.
    If it comes out at 5.00M or higher, EUR/USD should rally steadily for 40-50 pips.
    If it comes out at 4.69M or lower, EUR/USD should sell off steadily for 40-50 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
     
  2. ishmael2013

    ishmael2013 Recruit

    Joined:
    Jul 23, 2009
    Messages:
    7
    Likes Received:
    0
    RALLY AND SELL OFF? terms help plz

    The following sentence did not make sense to me:

    " If it comes out at 5.00M or higher, EUR/USD should rally steadily for 40-50 pips."

    Doesn't rally mean increase (i.e. EUR/USD goes up)? If so, why would the US dollar fall against the Euro if more US homes are sold? Wouldn't it be the other way around?

    What am I missing here?
     
  3. Boko Maru

    Boko Maru Sergeant

    Joined:
    Oct 11, 2007
    Messages:
    250
    Likes Received:
    0
    This has to do with risk aversion vs. risk appetite. In the current market environment (meaning since financial meltdown last fall), any bad economic news (not just in US, but globally) results in buying of the USD and the Yen since they are considered as "safe haven" currencies in times of trouble. As a result, bad economic news=EU, EY, GU, GY AU, AY etc. all going down, as people buy the USD and Yen. Just look at the charts for past news releases and you'll see that played out depending on news (good news=these pairs up, bad news=these pairs down).

    The scenario you're talking about (USD strengthening on good news), existed before the financial meltdown, but that's just not the case now, although it will probably go back to that way at some point.

    Another example of this is USD vs. the US stock market. They go in opposite directions. Stocks up=USD down and vice versa. Same thing as above re. risk aversion.

    Hope that helps :)
     
  4. icash55

    icash55 Recruit

    Joined:
    Oct 3, 2007
    Messages:
    7
    Likes Received:
    0
    "Traditionally" for Existing Home Sales EUR/JPY has been traded. Why EUR/USD this time? I think it's safer to trade EUR/JPY, at least it doesn't haves a counterintuitive USD component :)

    This "risk appetite/aversion" thing is weird.
     
    #4 icash55, Jul 23, 2009
    Last edited: Jul 23, 2009
  5. Mark Harding

    Mark Harding Corporal

    Joined:
    Oct 4, 2007
    Messages:
    75
    Likes Received:
    0
    Sir Pips explains all this stuff in the room at trading time.
     
  6. Boko Maru

    Boko Maru Sergeant

    Joined:
    Oct 11, 2007
    Messages:
    250
    Likes Received:
    0
    Actually, it isn't weird at all once you understand it. Take a look at the USD and Yen since the financial meltdown last fall. Both currencies have strengthened incredibly. Why do you think that is? Because of really good economic news out of the US and Japan? No, of course not. Again, tough times, bad economic news, etc., results in buying of these two currencies as they are considered "safe havens." The other currencies get sold off because they are not considered safe havens.

    You have to look at this from a global perspective, not just nation by nation like you could have a year ago.
     
  7. mohamad83

    mohamad83 Recruit

    Joined:
    Dec 9, 2007
    Messages:
    4
    Likes Received:
    0
    ?

    what do you mean by room?can any one explaine?tnks
     

Share This Page