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Sir Pipsalot's Tuesday Market Update 10-19-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Oct 19, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    EUR/USD managed a decent pullback Sunday/Monday, but it's unlikely that we've seen a major high just yet, so for now short to medium term dips should present ok buying opportunity when trying to trade off of trendline or channel support. It is possible though that the daily and 4 hour charts are trying to set up some sort of Head and Shoulders pattern here with a neckline around the 1.3770-1.3810, so if that pattern matures further with another rally into 1.4000 that fails, watch out for a short opportunity or at least put your SL in a smart spot to protect from a H&S reversal lower. For insight into my long term thoughs on EUR/USD, see Monday's signal.

    In news Tuesday, I don't trust German ZEW enough to trade it given the market's overfocus on the U.S. right now. Also, commentary from the ZEW can make it tricky for an afterspike at times. We do have one piece of major news worth trading though:

    0900 Bank of Canada Interest Rate Decision (no change @ 1.00% expected) -The market is unanimous in expecting no change, but I think there's still a 5-10% chance we'll see a big surprise hike. Unlikely, but possible. 12/12 economists expect the BOC to stay on hold not just today, but in December as well since the Canadian and global economies have cooled off quite a bit since their 3 straight rate hikes. Look for commentary to help drive a CAD move if they stay on hold as expected.

    --If they hike rates to 1.25% or higher, USD/CAD should plummet 100+ pips.
    --If they keep rates steady and turn sharply dovish and worrysome, USD/CAD should rally 50 pips as the markets price in a long pause from the BOC.
    --If they keep rates steady yet maintain enough of a hawkish stance to hint they may raise rates in December, USD/CAD should drop 50 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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