Sir Pipsalot's Wednesday Market Update 04-07-2010

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

The EUR/USD has indeed dipped further and is now hovering just under the 1.3390 fib level I mentioned yesterday. To me it looks as though EUR/USD is into a B wave lower, which could take many forms. Because of this, I'd prefer to only buy on a more conservative setup where the EUR/USD dips to 1.3300 or below at or near a double bottom with its Mar 25th low. It's possible we'll rally off the 78% retracement level instead at 1.3343, but I don't want to pick a bottom unless the price is quite attractive.

Stocks are looking a toppish again, so once we get a bit of slight confirmation with a down day, it should snowball into something bigger, so feel free to gamble a bit with good risk/reward on a short now if you feel saucy or hold out for a bit of confirmation in the coming days. One weak close should be enough.

In news Wednesday:

0428 UK Services PMI (58.0 expected) - Typically, when this trade hits a trigger, it hit a 40-50 pip target in the first 3-20 minutes, retrace somewhat, and reattempt those extremes within the first 40 minutes. Usually, there's about a 50-50 chance of the trade continuing in a steady trend over the next several hours; otherwise, it just consolidates in a range short of the spike extremes.
If it comes out at 59 or higher, GBP/USD should rally 40-50 pips.
If it comes out at 57 or lower, GBP/USD should fall 40-50 pips.

1000 CAD Ivey PMI (53.0 expected) - This trade is usually a very low stress money maker as it tends to move much more gradually than most news trades taking its time to gradually hit targets of 30-50 pips in the first 20-45 minutes. This allows you to take your time with the entry order and usually get an entry within 5-10 pips of the prerelease price if a trigger is hit. After about 40-45 minutes though, there's usually at least a temporary sputtering out, so I'd take profits around that time period if you're still holding out.
If it comes out at 57 or higher, USD/CAD should fall 35-45 pips.
If it comes out at 49 or lower, USD/CAD should rally 35-45 pips.

2130 AU Employment Change (20K expected) - When this trade hits a big trigger, it can be off to the races with little retracement. Smaller triggers usually register a nice pop in the first minute or so, but rarely offer a lot of additional follow-through. Also make sure the unemployment rate (5.3% expected) comes out in a complimentary direction.
If it comes out at 50K or higher, AUD/USD should rally sustainably for 50-70 pips.
If it comes out at 35 to 49K, AUD/USD should rally 30-50 pips quickly, but asking for a good retracement trade or continuation gets risky.
If it comes out at -9 to +5K, AUD/USD should fall 30-50 pips quickly, but asking for a good retracement trade or continuation gets risky.
If it comes out at -10K or lower, AUD/USD should fall sustainably for 50-70 pips or more.

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