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Sir Pipsalot's Wednesday Market Update 10-06-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Oct 6, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Well, I thought EUR/USD would manage a bit of a rally today, but long term it was a good time to start getting in short. I did not expect the 200 pip rally we got, that's for sure. For now, I am still short and adding to my long term position with this rally, but a push to near 1.4000 would force me out of the position completely. It seems like a lot of other people were eyeing 1.3800 as a very key level, so it's possible today's rally above it is a bit of a blow off to stop out some shorts and sucker in a few more longs before the impending decline. If you're looking to get in short EUR/USD long term, but aren't in already, I'd hold off and wait for a trade down through the 1.3760 swing low for confirmation. Once we trade down through that, the downside should come a bit easier. The upside seems a bit nebulous for me, so it's hard to comment on.

    We also have GBP/USD rallied right up near some resistance. I won't put out any specific trades here, but keep in mind that GBP/USD loves to make slight new highs, then reverse lower, so look for signs of false breakouts and consider cashing in on the reversal. We already saw that once today around the London close.

    In news Tuesday, we saw UK PMI come out with a bigger buy trigger, so the 50 pips of upside came very fast. We still had several 15-20 pip retracements all of which saw some profit if you bought the dip and took it as a scalp. In news Wednesday:

    0815 US ADP Employment Change (20K expected) - This report should work well if there's a solid 50K surprise, but it may still work decently (20-30 pips)on a tighter 25-30K trigger.
    If it comes out at 70K or higher, USD/JPY should rally 40+ pips.
    If it comes out at -30K or lower, USD/JPY should drop 40+ pips.

    1000 CAD Ivey PMI (62.0 expected) - This report usually produces a small initial reaction, but creates a nice steady trend for a bit of time. Last month for example saw 30-50 pips down over the course of 1-3 hours.
    If it comes out at 67.0 or higher, USD/CAD should drop 30+ pips steadily
    If it comes out at 57.0 or lower, USD/CAD should rally 30+ pips steadily

    2030 AU Employment Change and Unemployment Rate (20K and 5.1% expected) - Both numbers are equally important, so both have to be considered with any trade, and conflicts will be hard to predict. AU news has been especially key lately, so even smaller triggers may force a big move (like last month).
    If Employment comes out at 40K or higher (and UR doesn't come out high), AUD/USD should rally 50 pips.
    If Employment comes out at 0K or lower, (and UR doesn't come out low), AUD/USD should drop 50 pips.
    If UR comes out at 5.3% or higher, (and Emp. doesn't come out too high), AUD/USD should drop 50 pips.
    If UR comes out at 4.9% or lower, (and Emp. doesn't come out too low), AUD/USD should rally 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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