Forex Trading Signal 07/28/09

Crazy Cat

Former FPA Special Consultant
Hey folks,

Not much major action out there on Monday. It looks like stocks may want to make one more small push to new highs before topping out and starting a decent pullback/decline that should last 1-3 weeks. I'm not a fan of trying to pick the absolute top here, so I'd rather wait for it to noticably turn, then get in short after it's already started going. Signals are a bit mixed with the GU and EU... the medium term is still bullish looking for a run to new highs, but a near term dip is possible, so I'd rather wait for a dip into support (maybe 1.4050 tp 1.4120 on EU, and 1.62 to 1.6350 on GU). If it doesn't come and we go on to new highs on EU and GU without a pullback, then we don't lose anything; however, if we do get a dip, we'll be getting a much better price than entering now. In news Monday we saw US New Home sales better than expected (enough for a quick 40 pip spike on EUR/JPY), but not enough to hit our triggers or manage a sustained move. In news Tuesday:

1000 US Consumer Confidence (49.0 expected) - This indicator has been working wonderfully as long as you don't expect it to hit everything in the first minute or two. Generally, on this one you want to get in early within 20 pips or so of prerelease (often much better) and hold it for about 20-40 minutes. If there's a good enough (5+ points) surprise, usually the top/bottom comes about 20-40 minutes after the report anywhere from 25 to 45 or even 70 pips or more if there are other pressures helping out. If you mis-time the exit, I'd still look to close it by 10:45 EST at the latest. You may be able to watch stock movement for cues as to what the Euro's next move may be as the two may tend to correllate in the short term around news like this.
If it comes out at 54.0 or higher, EUR/USD should rally 40+ pips over 20-40 minutes.
If it comes out at 44.0 or lower, EUR/USD should sell off 40+ pips over 20-40 minutes.

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Sir Pipsalot