07.20.07
Daily Forex Trading Signal
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.
