Regarding Sunday (July 22th, 2007) and Monday (July 23th, 2007), those two days are dead. We really do not have anything going on these two days.
We do have Australian PPI coming out on Sunday at 9:30 p.m. New York time. I do not want to trade that report. Even if deviation is humongous which happens very rarely, usually the move is not that big. Last time we saw a huge deviation of 0.6% from expectations which is very big, and we only saw a quick jump on AUD/USD by about 22 pips or so, and it happened in the first five seconds. After that the price did not do anything - it consolidated. This is too difficult to trade, and it is extremely risky to trade.
There is really nothing coming out on Sunday and Monday, but on Tuesday and in the rest of the week we will have a few very interesting reports coming out. Wait for this Tuesday.
Let see what Friday news will makes impact on the currency market. Here is your daily forex trading signal for Friday 20th July 2007.
1. Friday, July 20th, 2007 (4:30 a.m. New York Time) UK
We have only 1 possible trade coming out, and it is UK GDP (gross domestic product). The UK GDP is a quarterly indicator that comes out every month. The first month we get the first reading which is called “advance reading”. Then, the second month we get first revision of the advance reading. Finally, in the third month we get a final revision of the initial advance reading. They simply adjust numbers as they get more data. The most important number that usually everybody looks at, and that causes biggest moves is the advance reading which we are going to get tomorrow. It is expected that gross domestic product in the UK will be increased by 0.7% in the second quarter of 2007, same as last quarter, and this is a very time sensitive indicator, especially during the economic times where the UK is doing interest-rate decisions. If it comes out of 0.8% or higher, I think it would be very bullish for the GBP/USD and we may see a move of 40 pips or more. On the other hand, if the indicator comes out at 0.6% or lower, it will possibly mean the economy is kind of slowing down, and I think we may see some profit-taking and some unwinding in the GBP/USD, good also for 40 pips or more in the first hour of the report.
Of course this move will depend where the prices are at. For example, the price is right now at 2.0480. If the price stays at the exact same level, we know we have very strong resistance at approximately 2.0540-45 so it will be very possible to see a 65 pip move to test that resistance in the upper side. However, it the the price is closer to that, say 0.0500 before the report, the move may be smaller. So, where the price is can always affect the move.
Remember, tomorrow is Friday so volatility can be crazy. That could either support this move, or it could go against this move. I just suggest you to trade it, see what is going on, and maybe close after 1 hour or less.
SUMMARY:
* Report: UK GDP
* BUY on GBP/USD if the number will be 0.8% or higher
* SELL on GBP/USD if the number will be 0.6% or lower
* If the trigger is hit, we may see a move of 40 pips or more in the first hour of the report.
There are only one Daily Forex Trading Signal for tomorrow. So check it out.
1. Thursday, July 19th, 2007 (4:30 a.m. New York Time) UK
Tomorrow we have only one report coming out that I feel is worth watching and possibly trading, and that’s the UK retail sales. It is expected to come out at around 0.3%. In my experience, if we see retail sales reading coming out at 0.5% or higher, we may possibly see a move up of 35 pips or more on GBP/USD. On the other hand, if the retail sales come out at 0.1% or lower, we may possibly see GBP/USD going down by 35 pips or more in the first hour of the report. Please be aware, however, if the GBP/USD is close to some strong resistance or support levels right now, like 2.0550 is very strong, if the price would be, say, 2.0520, the move may go to 2.0545 only. It always depends on how big the deviation is and where the price is. The bigger the deviation, the bigger the chance that we can break some strong levels, and the bigger the move could be. That’s a very violate report so I am hoping we will get a very good trade on it.
SUMMARY:
* Report: UK Retail Sales
* BUY on GBP/USD if the number will be 0.5% or higher
* SELL on GBP/USD if the number will be 0.1% or lower
* If the trigger is hit, we may see a move of 35 pips or more in the first hour of the report.
Tomorrow we have a very busy day with quite a few reports.
1. Wednesday, July 18th, 2007 (4:30 a.m. New York Time) UK
We are starting the day with UK BOE minutes. It is expected that the vote was about 6 to 3 towards the rate hike last month. If the vote comes out at 8 to 1 or 9 to 0, it will be possible buy on GBP/USD, probably good for 40 pips or more in the first hour of the report. It will largely depend on the price levels right before the report. On the other hand, if the vote was closer to 5 to 4, we may possibly see some unwinding in the GBP/USD, good for about 40 to 50 pips.
SUMMARY:
* Report: UK BOE Minutes
* BUY on GBP/USD if the vote was 8 to 1 or 9 to 0
* SELL on GBP/USD if the number will be 5 to 4
* If the trigger is hit, expect 40 pips or more in the first hour of the report.
2. Wednesday, July 18th, 2007 (7:00 a.m. New York Time) CANADA
Then, we have Canadian CPI coming out. The Canadian dollar has been extremely strong, and it is expected that the core y/y reading will be about 2.6%. If it reads at 2.7% or higher, I think we may see USD/CAD going down by 50 pips or more in the first hour of the report, and I think EUR/CAD may possibly go down by 80 pips or more in the first hour of the report. On the other hand, if the report reads at 2.4% or lower, it will signify much slower inflation on month-to-month basis, and we may see EUR/CAD gain probably 70 to 80 pips in the first hour of the report, and USD/CAD may possibly gain about 40 pips.
SUMMARY:
* Report: CANADIAN CPI Core y/y
* SELL on USD/CAD if the number will be 2.7% or higher
* BUY on USD/CAD if the number will be 2.4% or lower
* If the trigger is hit, expect 40 to 50 pips or more in the first hour of the report.
3. Wednesday, July 18th, 2007 (8:30 a.m. New York Time) USA
Then we have U.S. CPI coming out at 8:30 a.m. NY time. It is expected it will read 2.2% y/y core number, same as last month. If it reads 2.3%, it think GBP/USD may possibly go down by 50 pips or more in the first hour of the report. If the inflation slows to 2.1% or lower, I think GBP/USD may sustained further gains of 50 pips or more in the first hour of the report.
SUMMARY:
* Report: U.S. CPI CORE y/y
* SELL on GBP/USD if the number will be 2.3% or higher
* BUY on GBP/USD if the number will be 2.1% or lower
* If the trigger is hit, expect 50 pips or more in the first hour of the report.
4. Wednesday, July 18th, 2007 (10:00 a.m. New York Time) USA
At 10 a.m. NY time we have Bernanke talking and giving his semiannual testimony. Everybody expects him to be hawkish, and if he drops his hawkish tone, I think we may possibly see GBP/USD gain 50 pips or more in the first hour of the report. On the other hand, if he remains in a similar hawkish tone like before, most likely it will be too dangerous to trade but the way to trade his testimony will largely depend on BOE minutes and U.S. CPI reading. If you are new to this, I suggest you to skip the testimony because it may be a little bit too tricky.
That’s all for tomorrow. I hope you had a great day, and I wish you good luck with your trades. Thank you!
