This is Felix.
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Let's first review what happened last week.
I was out of town all last week so I was not trading at all. I pre-recorded all my signals, and every day one of my partners was sending them to you. That's why there were no reviews of my daily signals like normally we do.
From the all signals I sent you last week, there were 3 trades.
On Tuesday, Pending home sales hit my trigger which was supposed to be negative for the dollar, and positive for the GBP/USD. I told you to be extremely careful on this report, and watch out for revisions, and I also told you to watch out for a price action and any strong support and resistance levels because such levels can mute the report very much. Although the trigger was hit, it was very clear, according to the previous price action, that 0.0445 was a very strong level. The spike touched that level, and the price collapsed right after that. If you were stopped out for a small loss, that's normal. If you decided not to trade it because you recognized the revision and the strong resistance at that level, that's good for you.
The same day we had Australian retail sales coming out. They came out at 0.7% which was supposed to be a buy on AUD/USD, good for 40 pips or more. What actually happened was in the first hour of the report AUD/USD moved by around 57 pips so I hope you were able to take advantage of that, and make some money on it.
The last signal that was hit was a Canadian employment change which basically came out at 51.1K, and an unemployment rate also came out much lower than it was expected. That was supposed to be a sell on USD/CAD, according to the triggers I had given you. As you could see, USD/CAD went down from 0.9935 to about 0.9841 so it went down about 100 pips in the first hour of the report, and then it continued going down. I hope you took advantage of that one. As far as I know, this move happened relatively quickly so if for some reasons you were not able to get a good entry, and you missed this trade, don't worry about it. There will be other trading opportunities.
Other than these 3 reports, none of others hit my triggers that I gave you.
Let's now talk about what is going on Sunday, Monday and Tuesday.
It seems on Sunday we don't have much going on.
1. Monday, October 8th, 2007 (4:30 a.m. New York Time) UK
On Monday we have have Columbus day out of the U.S. We do have UK Industrial production and PPI input coming out at the same time. I would skip this one simply because the Industrial production failed to create any moves last two months. Manufacturing simply does not matter in the UK at this particular time. Let's skip this one, and return to this indicator when manufacturing will be a hot indicator again.
2. Tuesday, October 9th, 2007 (4:30 a.m. New York Time) UK
On Tuesday at 4:30 a.m. we will have a trade balance coming out of the UK. It is expected -6.9 B versus -7.1 B. In my opinion, if the trade balance comes out at -8 B or more negative, that would probably be negative for the pound, and GBP/USD may possibly go down by 35 pips or more in the first hour of the report. On the other hand, if the trade balance is -6 B or less negative, that may be positive for the pound, and GBP/USD may possibly go up by 35 pips or so in the first hour of the report. This should be relatively simple to trade, there is no other conflicting indicator. I would try to get in after the spike within 0 to 10 pips of the pre-release price, depending on the deviation. Use maybe 15 pips SL, and maybe 20 to 25 pips TP, depending on the price action, and let see what happens there. If you are interested in seeing what this indicator did in the previous months, you can go to Forexbastard calendar, and click on a little file box icon, and you will be able to see a history of that indicator for the last few months.
SUMMARY:
* Report: UK Trade Balance
* Sell on GBP/USD if the number will be -8 B or more negative
* Buy on GBP/USD if the number will be -6 B or less negative
* If the trigger is hit, expect 35 pips or more in the first hour of the report.
3. Tuesday, October 9th, 2007 (2:00 p.m. New York Time) USA
Then at 2 p.m. New York time we will have FOMC meeting coming out. This one will be pretty important. During the last FOMC meeting the Fed cut the rate by a half of point, and we saw a very nice move on GBP/USD. A lot of people receiving these signals made a lot of money. There is one thing that is worth watching at this FOMC minutes. If they say that Fed is ready to cut more rates, I think that it would be negative for the U.S. dollar, and GBP/USD may possibly go up by 50 pips or more in the first hour of the report. If there is anything else said that does not hint towards future rate cuts, or if the Fed is being uncertain about what they will do in the next few months, then I would suggest to skip and not trade it. If you decided to trade, I would suggest to enter within 10 to 15 pips of pre-release price, after the initial spike, if they clearly state that they were planning to cut more rates.
That's all for Tuesday. Next signal will be send on Tuesday, and I will review what happened on Tuesday, and I will talk about Wednesday.
If you haven't been to my
www.ForexDiamonds.com website, I strongly recommend you to go there. This is my live trading service, and you can trade live with me and one of my partners. Currently I am offering 21 days trial for that service, so go to that web page, and read about it. I definitely think everybody should at least try that service, and at least learn something during that 21 days.
I hope we will make some money on Tuesday. Have a wonderful weekend. Thank you very much!
To Our Success!
-Felix Homogratus
