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Sir Pipsalot's Tuesday Market Update 02-16-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Feb 16, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Well, I was just plain wrong about the EUR/USD yesterday. We did indeed break 1.3600, but we only managed to follow-through another 21 pips instead of the 50 I expected. I guess I failed to take into account the thin trading volume due to the market holiday. Ah well, the volume should come back sometime today. Right now though I've shifted into somewhat of a neutral stance on the Euro until we get an idea of whether or not the volume returning will resume the downtrend or cause a bounce. My guy tells me downside, but my eyes are telling me upside, so I'm shifting more into neutral for the day.

    Stocks seem to be climbing in the futures market ahead of the Tuesday morning open, but I am not optimistic about the live NY session holding onto strong gains, so again, I think shorting is the way to go to start the week. My best guess is that any strength will be limited to around the mid to high 1080's on the S&P.

    In news Tuesday, there are 2 reports worth watching, both in the European session:

    0430 UK CPI y/y (3.5% expected) - Dovish rhetoric on inflation dominated the last BoE rate statement, and inflation numbers seem to be picking up their significance as of late. Last month we saw GBP/USD move about 35 pips, double top and reverse after higher than expected CPI figures, but I believe they could drive the market even more this month.
    If it comes out at 3.7% or higher, GBP/USD should rally 40 pips.
    If it comes out at 3.3% or lower, GBP/USD should fall 40 pips.

    0500 German ZEW Economic Sentiment (41.0 expected) - This is another indicator starting to make a comeback and I've decided to readd it to our trading calendar this month. With questions over whether the recovery is sustaining or losing ground, predictive surveys like these are getting extra attention when there are big surprises. While a 2-4 deviation should see 20-30 pips usually, I'd rather hold out for a bigger surprise of +/- 5.
    If it comes out at 46 or higher, EUR/USD should rally 40 pips.
    If it comes out at 36 or lower, EUR/USD should fall 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. If you have any questions, you can also email me at sirpipsalot@profitmongers.com

    To our success!
    Sir Pipsalot
     

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