Daily Forex Trading Signal
We have 2 reports coming out that can make some significant moves.
1. Tuesday, July 10th, 2007 (4:30 a.m. New York Time) UK
First, we have a UK trade balance coming out at 4:30 a.m. NY time, and trade balance could be a very important indicator when the nation does not really focus on the inflation. There are periods of time when inflation is stable and the government does not do anything with interest rates for several years. During those times trade indicators start becoming very important but when the inflation is very important – like it is right now – the trade balance takes a backseat and do not make any big moves. However, they do make some moves. The UK trade balance is expected to come out at -6.6 billion, that’s visible trade balance, there are three different components of trade balance. If the trade balance comes out at -7.2 billion or more negative, it would be the most negative reading on trade balance since May 2006. I think that could have some effect on the GBP/USD, and it may may go down by 30 pips or more in the first hour of the report. However, if the trade balance comes out at negative -5.999 billion or lower, basically -6 billion or less negative, it would be the highest reading on trade balance since the end of 2005, and it think it would be a nice surprise for the UK, and I think that would be good for the pound short-term so GBP/USD may possibly go up by 30 pics or more in the first hour of the report.
SUMMARY:
* Report: UK Trade Balance
* Sell on GBP/USD if the number will be -7.2 B or more negative
* Buy on GBP/USD if the number will be -5.999 B or less negative
* If the trigger is hit, expect 30 pips or more in the first hour of the report.
2. Tuesday, July 10th, 2007 (9:00 a.m. New York Time) CANADA
Then, at 9 a.m. NY time, we have Canadian interest rates statement. It is pretty much unanimously expected that Canada will raise interest rates to 4.50%, and if they do it is questionable what will happen because it is fully priced in. I think people will be scrutinizing some of the comments that may accommodate the interest rate decision. If comments are hinting towards possibility of another rate hike this year, Canadian dollar may gain some more strength. However, it the comments are a dovish and the Bank of Canada is saying that they really need to assess the situation after this interest rates statement, I actually think will may see a retracement or move up on USD/CAD and EUR/CAD.