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Sir Pipsalot's Friday Market Update 06-01-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jun 1, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

    Dec 11, 2007
    Likes Received:
    Hey folks,

    My outlook for EUR/USD remains unchanged from Friday and Monday. I'm tentatively bullish short to medium term as long as we stay above 1.2200 (now 1.2280). If/when that level goes, I'll turn more aggressively bearish looking for a break of lows and downtrend resumption medium to long term. Assuming a more substantial bounce does develop in line with my bias, I'd target 1.2580, 1.2850, and 1.3050 for TP's (most taken at the first one).

    On stocks, it's hard to say whether we finish this bounce with a further rally or round off here into the next selloff. I still think the odds favor a further bounce above 1100 (now 1084) where I plan to short in the 1110 to 1120 range. See Friday's and Monday's signal with more detail there as the plan remains unchanged.

    In news Monday, we saw both Aussie Retail Sales and Interest Rates come out pretty tame. Instead of tipping a strong hand towards hiking or staying on hold, the RBA basically said further hikes or rate stability is dependent upon the evolving state of the European debt crisis, so essentially they're not showing a whole lot of bias there, even though that means they'll be on hold a bit as this sorts out. In news Tuesday:

    0428 UK Manufacturing PMI - I don't plan to trade this... UK news has been pretty poor lately and this one is hit and miss even when UK news is doing well.

    0900 CAD Interest Rate Decision (0.25% HIKE to 0.50% expected) - 25 out of 27 economists expect the BOC to hike rates for the first time since May 2007, but there's a good chance with global risk aversion starting to take hold based around the European debt crisis, that the BOC could hold off for another 6 weeks until the July 20th meeting. Simply put, if they don't hike, that will be a great long USD/CAD opportunity and I think there's a measurable chance that will happen.
    --If they keep rates steady, USD/CAD should rally 40-50 pips.
    --If they hike rates by 0.50% or more (more than expected), USD/CAD should fall 50 pips or more.

    1000 US ISM Manufacturing (59.0 expected) - This report is not quite as good as it once was, but given that the stock market will be open and likely looking for an excuse to rally, a positive number here could gain traction on JPY denominated pairs and lead to broad based risk appetite.
    If it comes out at 61.0 or higher, USD/JPY should gain 30+ pips and possibly get a modest uptrend moving good for a 50-60 pip swing trade.
    If it comes in low, I'd probably stay out of this one.

    2130 AU GDP q/q (0.6% expected) - With relatively upbeat statements from the RBA today about the Aussie economy, look for some strength on the AUD/USD leading into this one as traders bet on a positive surprise.
    --Try buying AUD/USD around 1900 EST and closing at some point a few minutes before the news.
    --If it comes out at 0.9% or higher, AUD/USD should rally 30-40 points.
    --If it comes out at 0.3% or lower, AUD/USD should fall 40-50 points.

    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. If you have any questions, you can also email me at sirpipsalot@profitmongers.com

    To our success!
    Sir Pipsalot
    #1 Sir Pipsalot, Jun 1, 2010
    Last edited: Jun 1, 2010

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