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Sir Pipsalot's Thursday Market Update 04-08-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Apr 7, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    The EUR/USD continues to pull back and has made it through the 78% at 1.3343, so now the scenario I've been waiting for to buy the dip at or near a double bottom seems to be playing out. My basic plan is to look to buy the EUR/USD somewhere in the 1.3250-1.3300 range with a 40-70 pip SL (March low was about 1.3265) if and when it shows some signs of support or reversal. I don't quite feel like throwing a blind limit order somewhere in there and hoping out for the best picking a bottom amidst this strong downmove. However, I do still see us in a wave B down which means it's likely to bottom soon and head higher back into the 1.3500's followed by the 1.3800's potentially as well.

    Stocks did in fact have a weak day yesterday, confirming they did indeed top out Tuesday. I took the early riskier trade yesterday short at 1183 after I published my signal, took 10 points profit, and am getting back in now. I think getting short now makes a lot more sense now that we've gotten a bit of confirmation, so getting in short at some point in the next 24 hours [ESM0 (S&P 500 futures) is now at 1177.50] is a great opportunity with an SL a bit above Tuesday's highs. If/when we break lower through 1159, that will confirm this is definitely more of a multi-week decline likely to take us at least to the 50% retracement around 1112. Obviously if we top out significantly, this could end up being the retracement high for the last year, and while it's been tough to call a top like that, if it ends up working out that way we should see 500+ points down as the bear market resumes.

    In news Wednesday, we saw UK Services PMI come out low and lead to a 50 pip or so decline in the first 10-15 minutes, about a 50% pullback, and a resumption lower about 50 minutes after the news fitting the patterns I <a href="http://www.forexpeacearmy.com/forex-forum/sir-pipsalots-daily-trading-signals/9384-sir-pipsalots-wednesday-market-update-04-07-2010-a.html">mentioned yesterday</a> very closely. Unfortunately, CAD Ivey and AU Employment came out too close to expectations for a trade. In news Thursday:

    0430 UK Industrial Production m/m (0.5% expected) - This trade had been a real dissapointment for quite some time until last month where it registered a 50-60 point move in just 5-10 minutes. I can't be sure whether or not it's back for good, but with a big deviation, it's worth a shot.
    If it comes out at 1.0% or higher, GBP/USD should rally 40 pips.
    If it comes out at 0.0% or lower, GBP/USD should fall 40 pips.

    0700 BoE Interest Rate Decision (no change on rates & no QE expected) - They are unlikely to release a statement if they make no changes to interest rates and refrain from starting another round of quantitative easing via another Asset Purchase Facility. If they somehow do make a change though, it would be a big surprise.
    If they hike rates at all, GBP/USD should rally 100+ pips.
    If they initiate another round of QE, GBP/USD should fall 50+ pips.

    0745 ECB Interest Rate Decision (no change expected) - The ECB does not release a press statement with the decision, just Trichet's speech that starts around 0830 that slowly offers insight but is problematic to trade. As with the BoE, very unlikely to make a move but if there's a surprise it would be huge.
    If they hike rates, EUR/USD should rally 100+ pips.
    If they cut rates, EUR/USD should fall 100+ 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. If you have any questions, you can also email me at sirpipsalot@profitmongers.com

    To our success!
    Sir Pipsalot
     
  2. Vladon

    Vladon Private, 1st Class

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    It is just not true, officer, because yesterday you wrote:

    and it [CA Ivey PMI] came at 57.8 (with no move down, just the sharp reversal).
     
  3. manneke

    manneke Private, 1st Class

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    you have to look before release at the last expectation in the calendar from fxpeacearmy or fxfactory, the expectations had changed yesterday for cad ivey, and the deviation was indeed small. Sirpips was right, he gave a deviation from expectation, and it is up to you to check it out if there is any change, this happens some time.
     
  4. Vladon

    Vladon Private, 1st Class

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    On the forexfactory expectation for Ivey PMI was 55.1 yet on Monday.
    On FXPA it indeed have changed, but only after release, that is post factum.
     
  5. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Sorry about that... sometimes the expected level changes in the last day or so and I miss it. Sorry about that, but the expected shifted from about 53 to 55 making the +/-4 deviation I was looking for more like 59 for a sell. That's one of those things that having the trade room is helpful for.
     

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