Sir Pipsalot's Wednesday Market Update 02-17-2010

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

The EUR/USD managed to extend it's bounce Tuesday and has run into a resistance region just ahead of 1.3800. From a 1hr to 4hr standpoint, this area 1.3700-1.3800 looks to be a good region to look for a short to play the range and hold a portion in case the downtrend resumes. Right now with EUR/USD starting to turn and now at 1.3746, I think it's worth looking short at these levels.

I expected stocks to move lower after an initial open higher, but instead they showed some additional strength on the back of risk appetite. It's obvious that this bounce is more significant than a quick retracement, so it's likely to extend higher to around 1100-1104 which should act as a bit of a magnet. Chances are there will be a good medium to long term short opportunity from there, but we'll have to see.

In news Tuesday, we saw both UK CPI and the German ZEW come out to close to expectations for a clear trade. In news Wednesday:

0430 BoE Meeting Minutes & Claimant Count Change - (10K expected on CCC) - Since the BoE has released their quarterly inflation report since the last interest rate meeting, focus on this one may be tilted a bit more towards the unemployment data as opposed to the meeting minutes. Look for the CCC to deviate in the same direction as the ILO Unemployment Rate (7.8% expected) and Claimant Count Rate (5.0% expected) for a safer trade. Heading into the news, we may see some GBP weakness based on the dovish tone exhibited in the inflation report, so feel free to try a sell on GBP/USD 30-60 minutes prior to the news if the conditions look right to take advantage of anticipatory weakness.
If the CCC comes out at 0 or positive, GBP/USD should fall 30-40 pips.
If the CCC comes out at -20K or lower, GBP/USD should rise 30-40 pips.

0830 US Housing Data - I don't plan to trade this, but I will take a look at it after the fact to see if it's worth trading next month. Housing data hasn't produced many good trades lately.

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

To our success!
Sir Pipsalot