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Sir Pipsalot's Wednesday Market Update 08-04-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Aug 4, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

    Dec 11, 2007
    Likes Received:
    Hey folks,

    EUR/USD long recommended yesterday worked perfectly hitting our target, and I even called the top on the EUR/USD within 10 pips well ahead of time. While we do have some upwards momentum in the mix, it's fast becoming time for a sharp turn lower, and there's alot of signs in the market that that time is coming either now or soon. I have a fairly aggressive uptrend support line drawn on the hourly chart, and right now, it would suggest a break of 1.3200 will see at least 50-80 pips lower, and I think that may snowball into a larger selloff over the next few days. You could get in short a bit early and speculatively here at 1.3215 or better, or wait for a trade through 1.3200 for confirmation to get in short. I'm using 50 pip SL and TP targets of 1.3150 (or 1.3120), and final TP around 1.3050-1.3070.

    My bias has not fully flipped to short yet on the Euro, but it will take very little confirmation to do so. In the meantime, it's still quite possible we'll see another thrust upwards before the end... that's what makes the early entry riskier at this point. GBP is in a bit of a stronger position, but will likely roll over if/when EUR/USD establishes clear downside momentum.

    USD/JPY has put together some noteworthy downside. My short from mid-July just didn't have the patience to hold out. USD/JPY is now within 60 pips of reportedly 50 year lows (according to TTN) at 84.81. There's also talk of potential intervention and heavy bids floating around the 85.00 handle. For now, I would attempt to buy USD/JPY with a limit order at 85.01 for a 20 pip TP/SL scalp for some hopefully easy money playing off of bids in the area. After that, I'm not sure since I'm long term bearish Yen cross pairs, and USD/JPY should break those 2009/50 year lows sometime in the near future. More on this pair as the week develops, but at least there's an obvious key level to play off of for now.

    Stocks also topped out right in my 1120-1130 sell range and turned lower now at 1115 on S&P futures. Please see yesterday's signal for more on my S&P short strategy that's off to a solid start:

    In news Wednesday, we have 3 items to look forward to:

    0428 UK Services PMI (54.5 expected) - UK Data has performed decently as of late, so hopefully we'll get back into old form on this one. Usually this news won't reach it's full potential right away and will take 3-5 minutes, or sometimes even 20 minutes to push a full 30-50 pips. If price retraces back through the pre-release price though, I'd consider it busted.
    If it comes out at 55.3 or higher, GBP/USD should rally 40 pips
    If it comes out at 53.7 or lower, GBP/USD should fall 40 pips.

    0815 US ADP Employment Change (30K expected) - Last month, a small but significant deviation pushed USD/JPY down 20 pips, so I find that reassuring that a more sizable deviation should move USD/JPY 30+ pips.
    If it comes out at 80K or higher, USD/JPY should rally 30+ pips.
    If it comes out at -20K or lower, USD/JPY should fall 30+ pips.

    1845 NZ Employment Change q/q (0.4% expected) - Last quarter (May), we saw a huge positive deviation for both Employment, and a huge surprise with very low Unemployment Rate as well. This resulted in a 65 pip rally over the course of 40 minutes. Let's hope the economists are just as wrong on this one. A more reasonable trigger level should still push NZD/USD 35-40 pips as long as there's no conflict with the Unemployment Rate (6.2% expected).
    If it comes out at 0.8% or higher, NZD/USD should rally 35-40 pips.
    If it comes out at 0.0% or negative, NZD/USD should fall 35-40 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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