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Sir Pipsalot's Thursday Market Update 07-22-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jul 22, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Well, the EUR/USD finally broke out of that 1.2850-1.3000 consolidation range with a nice break lower into the 1.2700's (now 1.2781). While we may see a shorter term bounce, the trend seems to have turned downwards for at least the next few days. I plan to short into a short term bounce looking for a selloff to around 1.2450 ultimately. Right now, I think a limit sell around 1.2730-40 with about a 100 pip SL makes good sense.

    USD/JPY continues to range trade, but with risk aversion starting to creep into the markets, a break of last Friday's lows could be soon at hand. I'm short from around 86.80 from last week, and will continue to hold short looking for 100-200 pips down from here. A rally through 88.00 would negate my outlook, while a break below 86.27 would increase the odds further. I continue to remain bearish on other yen crosses as well as I have been for the past week.

    The S&P 500 gave back pretty much all of yesterday's gains today and while we're not out of the woods yet, it still looks good to stay in our short from last Friday morning. A break higher through 1102 would negate this outlook while a break lower through 1050 would help solidify the odds.

    In news Wednesday, the BoE minutes came out pretty much as expected, but the market seemed to have some overly pent up bullish aspirations for them and was quite disappointed. Seeing the sharp initial reaction to the statement, we got in short on a pullback and made a bit of money after the news. Essentially, the market was hoping the BoE was building up towards a rate hike, but the minutes showed they seem to be unwilling to budge any time soon. In news Thursday:

    0430 UK Retail Sales Ex Fuel m/m (0.6% expected) - This indicator has a very solid history, but recently we've seen mostly small deviations and spotty behavior on decent triggers; however, given the BoE's "wait and see" stance right now, this indicator could be poised to inspire a pretty solid move on GBP/USD.
    If it comes out at 1.2% or higher, GBP/USD should rally 40-50 pips.
    If it comes out at 0.0% or negative, GBP/USD should fall 40-50 pips.
    Note - Look out for the with gasoline number as well to ensure there aren't any major conflicts.

    0830 CAD Retail Sales headline m/m (0.4% expected) - When a trigger hits on CAD RS, there tends to be a 30-45 pip initial reaction, followed by some form of consolidation or retracement that often lasts 20-40 minutes, but eventually the pressure from the news forces the trade further along. Given this common pattern, if the initial move is too hard and fast, consider picking a good spot on retracement in the first 20 minutes or so. Last month's low number sent USD/CAD up 35 pips right away, then it consolidated with a 15 pip pullback that bottomed out 23 minutes after the news, and followed that with a 100 pip rally over the following 90 minutes.
    If it comes out at 0.9% or higher, USD/CAD should sell off 40+ pips.
    If it comes out at -0.1% or lower, USD/CAD shoul rally 40+ pips.

    1000 US Existing Home Sales (5.10M expected) - Unfortunately, last month's very low number failed to inspire much of a move on currencies, but it did make for a nice move on the S&P 500. While it didn't cause much USD/JPY downside, it also didn't turn into a rally either so at least it was a break even type situation. This month I'm willing to give this number another chance considering we're at a potential accelleration point in many markets.
    If it comes out at 5.35M or higher, USD/JPY should rally 30 pips.
    If it comes out at 4.85M or lower, USD/JPY should sell off 30 pips.
    If you trade stock futures, consider a short swing trade there held for 1-2 hours in the direction of the news.

    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, Jul 22, 2010
    Last edited: Jul 22, 2010
  2. NATAN SHAIN

    NATAN SHAIN Private

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    help

    hello s.p.
    you write " I think a limit sell around 1.2730-40 with about a 100 pip SL makes good sense "
    did you mean 1.2830-40 ?
     
  3. wisefxtrader

    wisefxtrader Private

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    Yeah Stop loss can be anywhere between 1.2830-1.2850 depend on the fill price if you follow SP recommendation sell 1.2730-1.2740.

    I did not short that low and it was new fresh after the consolidation since it broke out from persistence range for few days. I felt there was a big possibility bounce off from the low first as well as EURUSD is also waiting for the results from bank stress results. I think it will be revealed tomorrow.


     
  4. MidnightRun

    MidnightRun Sergeant

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    Bank Stress Tests

    Results will be revealed tomorrow, Friday, at around 12 a.m. New York time.
     
  5. MidnightRun

    MidnightRun Sergeant

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    Stress Test

    This is what TD Bank's FX analysis said this morning:
    euro zone bank stress test results are due
    Friday though reports earlier today suggested an earlier
    release was possible
    .
     
  6. wisefxtrader

    wisefxtrader Private

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    stop loss would be around 1.2830-40 based the entry sell 1.2730-1.2740

    He set 100 pip stop loss and determined his reward ratio good sense himself. He may assume 100 pips loss as good sense money management in his point of view.

    I hope you did not make that big loss. EURUSD has went higher.

     
  7. wisefxtrader

    wisefxtrader Private

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    Thanks for that info and will keep eye on it. It may be volatile ride



     

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