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Sir Pipsalot's Daily Market Update 1-04-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jan 4, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Happy New Year everyone! 2009 saw quite the rollercoaster of price action, but I have a feeling 2010 could see even larger price swings. I can't wait to see how this week starts out to give a bit more data on how the new month/quarter/year will get moving.

    The EUR/USD is looking a bit disjointed. The rally that topped out is far too shallow for the typical retracement of the decline off the highs in early December, but the recent decline seems impulsive and has even penetrated the 78% retracement of the rally. Personally, I'd see the premature rally fizzling as more of a thin market aberration rather than a new major extention lower forming. Either is possible, but I still believe the near term odds are greater on the bullish side for EUR/USD. See my analysis from last week as I believe it is still germane -- http://www.forexpeacearmy.com/forex...psalots-daily-market-update-12-30-2009-a.html

    I'm still bearish on stocks, and we got a nice end of the year jolt lower to finish off 2009. Key technical support still hasn't been pierced though, so until we see levels like 1089 go by in the rearview mirror, it's probably best to look at stocks as more of a range trade that still has some further downside just in case they aren't quite ready to thrust lower with conviction. We are still waiting patiently though for a major turn lower in stocks in the not too distant future. It could already be at hand, but then again, it's had a lot of headfakes so far in this extended rally.

    This week is quite the busy new week to make up for recent holidays. Let's dig in... Monday, we'll see:

    0430 UK Manf PMI (52 expected) - This is not always tradable, but lately big deviations here have led to nice moves on GBP/USD. I'll be trading this one looking for a quick 3-5 minute reaction.
    If it comes out at 54 or higher, GBP/USD should rally 30-40 pips.
    If it comes out at 50 or lower, GBP/USD should fall 30-40 pips.

    1000 US ISM Manufacturing (54 expected) - This indicator has been up and down with how well currencies react to the news. I still think it's safest to trade a marginal report like this on USD/JPY. It's not the biggest mover, but it's likely to be the most reliable for a US report like this.
    If it comes out at 55.5 or higher, USD/JPY should rally 25-40 pips.
    If it comes out at 52.5 or lower, USD/JPY should fall 25-40 pips.

    That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.

    To our success!
    Sir Pipsalot
     

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