Upcoming Signals Overview (July 19~23, 2010)

Henry Liu

Former FPA Special Consultant
Messages
473
Hey Folks:

Henry Liu here again with your overview of upcoming high impact tradable releases scheduled for this week... As usual, I'll be sending you detailed analysis in my future posts, but hopefully this post will give you a heads up on whats coming next week.

It's a custom of mine to look at what took place during the previous week before looking at what might happen next week. This is what I wrote the week before last week:

AS COMPARED TO USD

EUR Gained 0.5% Against USD
GBP Lost 1.0% Against USD
CAD Gained 3.0% Against USD
AUD Gained 4.0% Against USD
NZD Gained 3.5% Against USD
JPY Lost 1.0% Against USD
CHF Gained 0.8% Against USD


...and this is what took place last week:

EUR Gained 2.5% Against USD
GBP Gained 1.5% Against USD
CAD Lost 2.0% Against USD
AUD Lost 1.0% Against USD
NZD Remained Unchanged
JPY Gained 2.0% Against USD
CHF Gained 0.5% Against USD


I don't know if you are seeing the bigger picture here, but aside from NZD, most commodity currencies remained weak this week as consolidation from last week's gain added to their weaknesses.

On the other hand, EUR and GBP gained across the board on positive news resulted from Greek and Spanish bond auctions, and the fact that many perpectual EURO shorts are balancing their books, which resulted in a strong demand for the EURO and ended up driving EUR/USD to the 1.3000 level.

JPY gained on deterioration of consumer confidence in the U.S., along with other negative news that we've getting lately... After breaching the crucial levels of 87.00, USD/JPY may be ready to rebound back. I sincerely do not believe we will see the 14 year low level (84.00?) being tested again as there are no Dubai World type of bearish news to set off that kind of capitulation again... Remember, Dubai World default fiasco took place during U.S. Thanksgiving Holiday last year while the market was extremely low on liquidity. This is NOT the case for today's market, in my opinion, therefore the possibility of USD/JPY dropping down to that level is highly unlikely.

Talking about both EUR/USD and USD/JPY, both gained 2.0% or more against USD, statistically speaking, we are likely to see both pairs rebound during early week, especially EUR/USD after touching the 1.30000 psychological support and bouncing back down to as low as 1.2915 during NY session.



Combined by the fact that EU will be releasing the results of the 91 banks stress test results. This would undoubtedly weigh on EUR this week as uncertainty usually spells "S-E-L-L" in Forexspeak.

And of course the news on IMF first suspending talks with Hungary and now postponing decision on the review of assistance will surely add to the bearish sentiment in Europe. Remember what took place last time when that doochebag in Hungary said that default is imminent? (BTW, suspending talks means Hungary won't get more mulah from IMF... so it should be bad for countries in the region... or Europe)


4Hr Chart From June 2, 2010 During Hungary Default Scare

I hope this long ranting gives you some kind of perspective to fundamental analysis. I don't just do news trading, I trade based on fundamental, technical, sentiment, and market cycle. I will post more of my trading methods in the Educational area in the future...

Ok, so here are the news releases we'll be trading this week:

1. Tue July 20, 2010 9:00am EST (NY Time) CA BOC Overnight Rate
Historical Data & Chart on BOC Overnight Rate

2. Thu July 22, 2010 4:30am EST (NY Time) UK Retail Sales m/m
Historical Data & Charts on UK Retail Sales m/m

3. Thu July 22, 2010 8:30am EST (NY Time) CA Core Retail Sales m/m
Historical Data & Charts on CA Core Retail Sales m/m

4. Thu July 22, 2010 10:00am EST (NY Time) US Existing Home Sales m/m
Historical Data & Charts on US Existing Home Sales m/m

**5. Fri July 23, 2010 4:30am EST (NY Time) UK Prelim GDP q/q
Historical Data & Charts on UK Prelim GDP q/q

6. Fri July 23, 2010 7:00am EST (NY Time) CA Core CPI m/m
Forex News Trading | Details and History for CAD Core CPI m/m

**High Impact & Possibly Trend Changing Event

Non-Tradable High Impact Releases For The Week:

A. Mon July 19, 2010 9:30pm EST (NY Time) AU Monetary Policy Minutes
B. Tue July 20, 2010 8:30am EST (NY Time) US Building Permits
C. Wed July 21, 2010 4:30am EST (NY Time) UK MPC Meeting Minutes
D. Thu July 22, 2010 8:30am EST (NY Time) US Unemployment Claims
E. Thu July 22, 2010 10:30am EST (NY Time) CA BOC Monetary Policy
F. Thu July 22, 2010 11:15am EST (NY Time) CA BOC Press Conference
G. Fri July 23, 2010 4:00am EST (NY Time) EU German Ifo Business Confidence

Remember, I'll be posting more detailed analysis on each of the tradable reports, so make sure check back 24 hours before their scheduled release time, or become a member of FPA today. I'll make sure to send you updates via email.


Thank you!


 
Last edited by a moderator:

TraderBob

Private, 1st Class
Messages
34
Fib Levels

Henry, do you use Fib levels for trading? On the gbp/usd it seems in a retracement, what target would you use?
 

Henry Liu

Former FPA Special Consultant
Messages
473
Henry, do you use Fib levels for trading? On the gbp/usd it seems in a retracement, what target would you use?
If GBP/USD were to drop correlating EUR/USD, I would look at the 1.4850 area for target technically speaking.

Fundamentally speaking, GBP is looking better than US and the Euro Zone because of the flexibility of having its own currency. The only concern is possible sovereign credit downgrade.

Overall I think GU may retrace down to the 1.50 level, which is the psychological support. Beyond it will be 1.4850, which is 50% Fib level but still above the 60 day SMA on the daily chart. At breach of this level, we should be looking to SELL GU. But then again I would warn blindly following technical analysis. Market moves because of news or even rumors of news, don't bet the farm on technical analysis.


Henry
 

TraderBob

Private, 1st Class
Messages
34
If GBP/USD were to drop correlating EUR/USD, I would look at the 1.4850 area for target technically speaking.

Fundamentally speaking, GBP is looking better than US and the Euro Zone because of the flexibility of having its own currency. The only concern is possible sovereign credit downgrade.

Overall I think GU may retrace down to the 1.50 level, which is the psychological support. Beyond it will be 1.4850, which is 50% Fib level but still above the 60 day SMA on the daily chart. At breach of this level, we should be looking to SELL GU. But then again I would warn blindly following technical analysis. Market moves because of news or even rumors of news, don't bet the farm on technical analysis.


Henry

Thanks, I use tech in absence of news as news can turn things on a dime.
 

KJeff

Recruit
Messages
7
Non-tradable news

Hi Henry, on the list of non-tradable news, does this mean that we must avoid to trade them?
I'm a newbie, and would like to know why we can't trade them, even though they are high
impact news.

Thanks.
 

Henry Liu

Former FPA Special Consultant
Messages
473
Hi Henry, on the list of non-tradable news, does this mean that we must avoid to trade them?

Thanks.
That's a good question. First of all we need to understand that those news also move the market. We don't trade them because their movements are quite unpredictable, and it is better to stay away than to wait for them and worst of all, get in on losing trades because the market didn't behave logically. So the basic course of action is to be aware of these releases and if you are planning to enter an order, just wait after the release.

Henry
 
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