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Forex Trading Signal 08/20/09

Discussion in 'Current Forex Trading Signals' started by Crazy Cat, Aug 20, 2009.

  1. Crazy Cat

    Crazy Cat Former FPA Special Consultant

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    Hey folks,

    Unfortunately, today's large stock rally after the initial lower open has muddied the waters somewhat and now the next move becomes much more of a question mark. On the EUR/USD, we may be topping out after yesterday's strong surge, or we could have another rally to or slightly through the 1.4327 highs before the next major decline. On the GBP/USD, it's a similar scenario with 1.6670. The short term fate of those pairs lie with the direction of the stock market, which is now unclear. If you're in position trade type shorts that are in profit, I'd continue to hold them, but any upside down trades might be best managed by tightening up your SL near this week's highs and waiting for a better spot to reenter.

    The odds were that stocks would manage more of a substantial decline to at least 968 and potentially below 950, but the decline from 1018 to 978 does satisfy a minimum 23.6% retracement and the size of the bounce today looks somewhat like the start of that final wave up to new highs. My biasing level is about 1007 on the S&P. If we go to/through that level, I'm planning on exiting my short position near break even (I entered shorts with a 1006.50 average price). Stocks very well may rally tomorrow to fill Monday's gap down to about 1005. Any more of a rally than that will realy tilt the scales towards the idea that the final rally leg is underway. As long as we fail to break up through those levels this week, the odds of the pullback lower continuing stay decent. Long story short... I wouldn't enter a trade in either direction until things clear up a bit tomorrow and Friday, but open trades in either direction may be worth holding with strategic stops.

    Silver broke south today near $13.50 and bottomed out a 5 wave decline that is currently pulling back up. Chances are it will edge higher more towards $14.20 to $14.63 before starting back down again. Gold could go either way short term right now. In any case, the key biasing levels there are respective $15.20 and $972 highs. As long as those stay intact, the odds for further downside remain very strong.

    In news Wednesday, the BoE minutes that I thought would be a big snoozer ended up causing quite a stir. Apparently the vote count for further QE was even more dovish than the decision to add 50 billion pounds to the Asset Purchase Facility. The vote was 6-3 with 3 members wanting an even larger 75 billion. That caused a large, sharp 50 pip spike down in the first minute, but the follow-through was only minimal with about another 30 pips lower max. CAD CPI came out too close to expectations for a trade. In news Thursday:

    0400 Norway GDP q/q (Mainland Norway s.a.) Expected at -0.3% -- GDP figures and interest rate decisions out of Sweden and Norway have been working pretty well lately, but it's still wise to trade them somewhat conservatively. Also, keep in mind the EUR/NOK and USD/NOK trade much differently than the major currency pairs we follow, so take some time to familiarize yourself with the price, pip volatility and spread levels before attempting a news trade on them.
    If it comes out at 0.00% or higher, EUR/NOK should drop 400 pips or more.
    If it comes out at -0.50% or lower, EUR/NOK should rally 400 pips or more.

    0430 UK Retail Sales m/m (expected at 0.4%) - This indicator has been very bi-polar lately. 2 months ago we got over 160 pips in less than 30 minutes, while last month on a similar deviation we got only 25 pips and an eventual reversal. In general, price reaction on GU to this release is pretty random when the deviation is under 1%, but it can be quite nice every now and then like we saw 2 months ago. Just keep in mind if we barely hit triggers, the possibility that the price action may underperform expectations. Other than that, game on because this historically is a great indicator on a good surprise.
    If it comes out at 1.3% or higher, GBP/USD should rally 40-50 pips.
    If it comes out at -0.5% or lower, GBP/USD should fall 40-50 pips.

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    Sir Pipsalot
     
  2. jlnh

    jlnh Recruit

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    Plunge Protection Team

    Sir Pips,

    Have you considered the influence of market distortion by actions of the (now world wide) Plunge Protection Team?
    Co-ordinated actions seem to have the exchanges close higher (unexpectedly) at the end of a session.

    JLNH
     
  3. fx57

    fx57 Recruit

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    for norway GDP , the expected for qq is -0.7, but you saying it is -0.3 ?!!
    do you mean YY ? becouse YY is expected -0.3, do you mean we use and trade YY only ?
     
    #3 fx57, Aug 20, 2009
    Last edited: Aug 20, 2009
  4. mechtech63

    mechtech63 Corporal

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    According to FXDD a Middle-Eastern person did a huge purchase yesterdsy of the Euro and kept buying lots of it for a few hours. Why would they do this? It had everyone running for the doors, according to FXDD. Wonder when they will sell and cause a plunge.
     
    #4 mechtech63, Aug 20, 2009
    Last edited: Aug 20, 2009
  5. cosmopolit

    cosmopolit Private

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    Reply for fx57

    First of all, when you quote a message take some time to remove all
    that is not necessary to understand what you are writting about.

    Now, to your question:

    If you carefully read the post from Sir Pipsalot, you could probably notice
    that he has written about Mainland Norway GDP. The expectation for
    it indeed was -0.3 q/q. You have misinterpreted it as a overall Norway GDP.
    The expectation for the latter indeed was -0.7 q/q.
     
  6. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    That's right. The Mainland Norway number is more important than the overall Norway number. In fact, the Mainland number came out high, while the overall number came out low, and the price action indeed moved along with the Mainland number coming in high.
     

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