Sir Pipsalot's Wednesday Market Update 03-10-2010

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

The EUR/USD and GBP/USD have managed to dip back into their ranges deeper than I had anticipated, even without a clear top on stocks. For now I'm just going to turn more neutral on them medium term and wait for more clear technical evidence. If anything, I'm looking to go back to playing ranges by buying dips into key support and selling rallies into key resistance.

Stocks continue to play games whiping up and down on light volume and making very little productive movement in either direction. Stocks continue what I believe to be a terminal rally phase before the next concerted selloff, but I have had trouble timing the turnaround on this extended move over the last month, so as I mentioned repeatedly last week, I'm waiting for clear, confirmed signs of reversal lower before I consider any shorter term trades. Long term of course, I believe stocks are poised very well for a short.

There are are a few news items due out Wednesday:

0430 UK Industrial Production m/m (0.3% expected) - The last 3 times we've hit decent triggers, the price action has been really disappointing, so I would probably skip this one unless there's a huge 1.0%+ surprise

1500 NZ Interest Rate Decision (no change at 2.50% unanimously expected) - The RBNZ has repeatedly said they will essentially keep rates unchanged through the first half of 2010, so there is essentially no chance they'll make a rate move, so any price action will be as a result of their text statement/speech.
If they hint at raising rates sooner in the June or early 3rd quarter timeframe, NZD/USD should rally 40 pips.
If they hint at holding rates steady through the 3rd quarter, NZD/USD should sell off 40 pips.

AU Employment Change and Unemployment Rate (15K and 5.3% expected) - Make sure there's agreement between the Unemployment Rate surprise and the Employment figures to ensure a safe trade.
If Employment comes out at 35K or higher and Unemployment Rate comes out at 5.2% or lower, AUD/USD should rally 50 pips.
If Employment comes out at -5K or lower, and Unemployment Rate comes out at 5.4% or higher, AUD/USD should fall 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

To our success!
Sir Pipsalot