AU Retail Sales

We´ll be getting the Retail Sales figure from Australia today once again, and if you´ve been following news out of Australia, you´d know that Retail Sales has been a sticky point for Aussie economy and a strong improvement may change the short term trend for the currency. Here´s the forecast:
9:30pm NY Time AU Retail Sales Forecast 0.2% Previous 0.9%
ACTION: AUD/USD BUY 0.7% SELL -0.3%


DEFINITION
“Measures the value of sales at the retail level. A rising trend has a positive effect on the nation´s currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders payclose attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.”




The Trade Plan
The deviation that we are looking for the Australian Retail Sales m/m release is for a minimum of 0.5%. If we get a 0.7% (or better) we´ll look to buy and if we get -0.3% (or worse), we´d look to SELL. There is a high probability of market movement of over 50 pips in the next 2 hours if we get our deviation.

Primary currency pair: AUD/USD , EUR/AUD, AUD/NZD
Forecast: 0.2
Previous: 0.9
LT1 (Lower Trigger 1): -0.7 [SELL]
UT1 (Upper Trigger 1): +0.7 [BUY]

If the Australian Retail Sales m/m comes out at -0.5 or more negative ( -0.7 trigger), AUD/USD should go down by about 30 pips. If it comes out at +0.9 or higher ( +0.7 trigger), AUD/USD should go up by about 30 pips.

Based on 20 estimates, median estimate is 0.2% and the average estimate is 0.1%. The highest estimate is 0.8% (one vote), the second highest is 0.5% (two votes), and the third highest is 0.3% (three estimates). The lowest estimate is -1.0% (one vote), the second lowest is -0.3% (one vote), and the third lowest is -0.2% (three estimates). One standard deviation is +/- 0.4%.

We have kind of bad luck with this report as for so many times in a row it did not deviate enough to trigger a trade. In the past, we saw bigger deviations so the triggers I pick are realistic.




Last month it came out at 0.9% vs 0.2% expected, and we saw about 25 pip spike, followed by additional move over the time. Not bad considering it was Sunday, although we also had Retail Sales Ex-Inflation (Q/Q) released at the same time, also deviating in the same direction.

Two months ago it came out exactly as expected so it was a no trade.

Three months ago also it came out exactly as expected so it was another no trade.

Four months ago it came out at -0.1 vs. +0.2 expected so it was a no trade.

Five months ago it came out at 0.0 vs. 0.4 expected and we saw almost 30 pip spike on AUD/USD.

Six months ago it came out at 0.2 vs 0.4 expected so it was a no trade although we saw 20 pip spike on AUD/USD. Not bad.

Seven months ago it came out almost as expected so it was a no trade.

Eight months ago it came out at 0.6 vs 0.2 expected (+0.4 deviation) and AUD/USD spiked up by about 30 pips.

Nine months ago it came out at 0.5 vs 0.3 expected and although it was a no trade for us, we saw about 30 pip spike.

Ten months ago it came out at -0.1 vs +0.4 expected ( -0.5 deviation) and AUD/USD spiked down by about 50 pips. It was a pretty good price action.

Eleven months ago came out at -0.6 vs +0.3 expected ( -0.9 deviation), and AUD/USD moved down by over 30 pips. It was not a huge move but I guess good enough to make a few pips.

Twelve months ago it came out at 1.1 vs. 0.4 expected ( +0.7 deviation) and while AUD/USD spiked up from 1.0623 to 1.0659 (about 35 pips), we saw pretty fast retracement. Overall it was not a bad price action but not the best either.

Thirteen months ago it deviated first time in a while. It came out -0.5 vs. +0.5 expected ( -1.0 deviation), and AUD/USD moved down by over 50 pips. It was a pretty good trade.

Please remember that sometimes Australian reports are released locally before the news hits major news agencies. Therefore, please always pay attention to significant price movements right before the release.

Fischer, former German Foreign Minister : Germany Europe does not sink

Fischer, former German Foreign Minister: "The Chancellor shortsighted. If the euro falls, we will be the big losers ".

"Twice in the twentieth century Germany through military means has destroyed itself and the European order. Then he persuaded the West to have drawn the right lessons: only fully embracing the integration of Europe, we got accepted our reunification. It would be a tragic irony if the united Germany, by peaceful means and best intentions, caused the destruction of the European order for a third time. Yet the risk is just that.''

Former German foreign minister is "worried" by a situation that defines "serious, very serious' for Europe.

And it is also skeptical, because they do not see you around "forces and leaders willing to take the necessary steps," without which "risks being swept away the miracle of two generations of Europeans: the massive investment in institution building, which has ensured the longest period of peace and prosperity in the continent's history. "

"I am concerned - Fischer says - that the current strategy is clearly not working. It goes against democracy, as demonstrated by the results of the elections in Greece, France and even Italy. It goes against the fact, we know since the 1929 crisis, the deflationary policies of Herbert Hoover in America and the Chancellor Heinrich Brüning in Weimar Germany, that the austerity at a time of financial crisis leads only to a depression. Unfortunately, it seems that the first to forget it is us Germans. Certainly Germany's economy is growing, but this may change rapidly, indeed is already changing. "

The former vice-chancellor of the red-green government calls not to be under no illusions: Europe is now on the brink of an abyss. "Either the euro falls, returns re-nationalization and the European Union disintegrates, which would result in a dramatic global economic crisis, something that our generation never experienced. Or are the Europeans towards the EU fiscal and political union nell'Eurogruppo. The governments and peoples of Member States can no longer bear the burden of austerity without growth. And we do not have much time left, I speak of weeks, maybe a few months. "

But it would not be possible to limit the consequences of Greece's eurozone output controlled?

"The euro is a political project. It's not that we need the single currency in the early Nineties. It had to be the vector of policy: this was the basic idea. No one today can guarantee that if Greece leave the euro will not face a collapse of confidence, a run on banks in Spain, Italy, probably in France, that is a financial avalanche that would bury Europe. Second, what do you think the Greeks would do once you get out? They would seek other partners, like Russia for example, which is already ready and nobody talks about. We should say goodbye enlargement towards South-East, European integration of the Balkans would be over. It's crazy: you can have different views on Turkey's European vocation, but there is no doubt that the Balkans, the region is inherently unstable, are part of Europe. Not to mention that Greece out of the euro would plunge into chaos. "

The current debate focuses on Eurobonds. But to fruition it would take months if not years. There is a false debate, compared to the short time of which you speak?

"No, it's an important debate. At the bottom behind the Eurobond is one of the next steps. The solution elements are four: Union Union tax policy and the Eurogroup, growth and structural reforms. For example, are admired by the fact that at this stage, Italy has mobilized its survival instincts, creating the government Mountains, which is working fine. But I remain puzzled that Hollande, the new French president, which I appreciate the commitment to growth, will bring to 60 the age at retirement. None of these elements should be ignored or watered down, must travel together if Europe really wants to overcome his existential crisis. "

Why do Chancellor Merkel does not move from the line of austerity?

"Angela Merkel thinks only of his re-election. But a calculation is shortsighted and makes a big mistake. Because domestic level is already much weakened. Merkel is strong as long as the German economy is strong. In Germany there is no economic crisis, but let's be careful because it can come upon us in a brutal manner. If we do not assume responsibility to lead Europe out of the crisis together, will be big trouble, because we would be the big losers, both economically and politically. "

What the German government can do what you propose?
"Only a grand coalition government. Otherwise, each party in opposition would be tempted to exploit this situation. But a government of national unity would succeed. Is not a simple step. "Why should we do?", Is the overriding question in Germany. '"

Yeah, why would you do?
"Simple, because otherwise go to hell sixty years of European unity. End. Rien ne va plus. Unfortunately we no longer have a Helmut Kohl to tell us. "

And how should the events take place, what is the immediate first step?
"The Europeanisation of debt. The problem here in Germany is right, then it is to avoid structural reforms to improve competitiveness or they stop being softened. It is not Europeanized the whole debt, there are interesting proposals on the table. But the basic point is that Germany must provide with its economic power and resources to the survival of the Eurozone. We must say we are a Union tax, let's stay together. It will be difficult, say their markets, rating agencies will probably take away the triple-A to Germany, but we must resist and do we need political union. And here is France must say yes to a common government, with parliamentary control of the common euro zone. At stake is the global role of Europe in the XXI century. We want to have one? Only together can we say something about our future and be heard. "

It's not too late for all this?
"No, we have a chance, you probably will not practice before the collapse. You have to have nerves of steel, the luxury of illusions we are not allowed. So far we have just reacted. The decisions of the EU have always followed the events. We have never acted in a strategic way. It is not enough. "

What does it mean the government and parliamentary oversight common?
"Let's forget for a moment 27. At the decisive moment are the countries of the Eurozone. Government leaders already act done by the executive European parliaments have national sovereignty over budget. We must take concrete steps towards a federation: in 1781 there was a similar situation in America. What did Alexander Hamilton? Federalizzò the debt of the States, in expenses for the bankruptcy of the Revolution against the British. If he had not, the young Confederation would not have survived. Here's what we do, too, here and now. Unfortunately we are not governed by political leaders, but the bookkeepers. "

It agreed to elect an EU president by universal suffrage, as suggested by Wolfgang Schäuble?
"Do not bring anything. It would make much more sense if the parliamentary majority and the opposition of every State were represented in a Eurocamera eurozone, where you can discuss directly with all the necessary legitimacy, the media attention and the involvement of the population. Would not it be a creation as outside the European parliament, which could become lower house. While the leaders were members of the European government. "

UK Revised GDP

May 24, 2012

Revised GDP q/q, or better known as the 2nd quarterly GDP release, is going to be the focus for today. This is for the first quarter of 2012 (Q1 2012) Here is the forecast:
4:30am (NY Time) UK Revised GDP q/q Forecast -0.2% Previous -0.2%
DEVIATION: 0.2% (BUY GBP 0.0% / SELL GBP -0.4%)



Definition
Revised GDP q/q from UK, is defined as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP is the basically direct measurement of the economy, and a stronger GDP means that the central bank will more likely raise interest rate as better economy usually brings higher inflationary pressure…


The Trade Plan
Since this is the second release of the 1st quarterly GDP for 2012, we´re not likely to get a huge surprise as most 2nd releases are pretty much inline. However, judging from the expected release of -0.2% and previous release of -0.2% (Prelim GDP), we may not get a surprise release after all.
 Our surprise factor is around 0.2% as we´ll look to possibly SELL GBP at -0.4% or worse, and BUY GBP at 0.0% or better, as I believe the only reason that would justify a short-term LONG on Sterling is definitely a 0.0% to a positive figure as this would signify that UK is not in a “technical recession”
Historically, if there is a 80% of chance that our S. Factor hits, the market will move up to 50~70 pips within the hour as GDP is a very high impact report.

EURUSD
Market still has some room to the downside, but retracement could come from 1.2480-1.2530 area.


Primary currency pair: GBP/USD
Forecast: -0.2
Previous: -0.2
LT1 (Lower Trigger 1): -0.2 [SELL]
UT1 (Upper Trigger 1): +0.2 [BUY]

If UK GDP q/q comes out at -0.4 or more negative ( -0.2 trigger), GBP/USD should go down by about 20 pips. If it comes out at 0.0 or higher ( +0.2 trigger), GBP/USD should go up by about 20 pips.

Based on 29 estimates, both median and average estimates are -0.2%. The highest estimate is -0.1% (only three votes) and the lowest estimate is -0.3% (nine votes). That means that 17 out of 29 economists expect it to come out at -0.2. One standard deviation is 0.1%.

I think +/- 0.2 deviation should be enough to cause a spike. The problem is it rarely deviates for the 2nd reading so unfortunately it might be another no trade.

However, keep in mind we will have bunch of other reports that may add some noise to the price action.

Since it's the 2nd release, don't expect big spikes here.

GBPUSD

Supports  :  Weekly       1,561  ;    Daily  1,565    ;  Hourly  1,5675

Resistances  :  Weekly  1,5795 ;   Daily  1,5735  ;  Hourly  1,5695




BOOKS


Forex Price Action Scalping: an in-depth look into the field of professional scalping - Bob Volman - EUR 27,19


ACH15® Discovery: always 100% won transactions in FOREX market! - florin iacob - EUR 115,34



EUR/GBP in a Nutshell: A Simple Guide on How to Trade the EUR/GBP in the Forex Market - Elena Sanchez - EUR 7,68

US New Home Sales

May 23, 2012

   

US New Home Sales usually follows the trend of Existing Home Sales, therefore we´re likely to see an inline release today.
Here is the forecast:
10:00am NY Time New Home Sales Forecast 335K Previous 328K
DEVIATION: 70K (BUY USD 400K /  SELL USD 260K)



Definition

“Measures the annualized number of new residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation´s currency because the housing market is a leading gauge for the overall economy. A high level of housing activity signals that the construction industry is healthy and that consumers have the capital to make large investments. More importantly, new housing activity creates an economic ripple effect as home owners buy goods such as appliances and furniture for their homes, and builders buy raw materials and hire more workers to meet demand.”

The Trade Plan
We´ll trade this release using a deviation around 70K; if the release is lower, it would strengthen USD aversion sentiment and we should look to SELL USD. A stronger number could provide temporary support for the USD and we may see a slight rally therefore we should look to BUY USD.

Primary currency pair  : USD/JPY , EUR/USD , AUD/USD


USDJPY
Supports    : Weekly  78,20  , Daily  78,95  , Hourly  79,25


Resistances  : Weekly 80,15  , Daily 79,65  , Hourly 79,45


BOOKS


Forex Price Action Scalping: an in-depth look into the field of professional scalping - Bob Volman - EUR 27,19

 

CA Core Retail Sales

May 23, 2012

Retail Sales is usually a very tradable release as traders draw direct correlation between retail activities with economic health.
Here´s Forecast:
8:30am Core Retail Sales Forecast 0.6% Previous 0.5%
DEVIATION: 0.5% (BUY CAD 1.0% / SELL CAD 0.0%)



Definition
Our focus is on the Core Retail Sales release and not the headline Retail Sales release; Retail Sales releases from Canada is a month on month release, and basically it´s a measurement of the activities at the retail level of Canada, and the Core release is the same Retail Sales but excluding most volatile components, Automotive Components, which makes up about 25% and it varies seasonly. A better release generally means more consumer spending, which leads to better economy, thus better for its currency. And the CORE reading provides a far more accurate look of the actual economy.


The Trade PlanI´m going to be looking for a deviation around 0.4 ~ 0.6% for this news. Since the forecast is at 0.6%, a reading of 0.0% would be negative for the CAD and we´ll be looking to SELL CAD; however, if the opposite is true, or a 1.0% (or better) of actual release, I´ll be looking to BUY CAD.


Primary currency pair: USD/CAD ; AUD/CAD
Forecast: 0.5
Previous: 0.5
LT1 (Lower Trigger 1): --- [BUY]
UT1 (Upper Trigger 1): --- [SELL]

As promised, while I don't recommending trading it yet, I will provide some stats so you can make your own decision.

There are 20 estimates for Canadian Retail Sales Less Autos (Core). Median estimate is 0.5% and the average estimate is 0.5%. The highest estimate is 0.8% (two votes), and then the second highest is 0.7% (two votes). The lowest estimate is 0.3% (three votes), and then the second lowest is 0.4% (two votes). One standard deviation is 0.1%.

For the headline number (CA Retail Sales m/m), it is expected to come out at 0.3% vs. -0.2% last month. Based on 21 estimates, both median and the average estimates are 0.3%. The highest estimate is 0.9% (one vote) and then 0.8% (also one vote). The lowest estimate is -0.2% (one vote), and then the second lowest is 0.1% (four votes). One standard deviation is 0.2%.

Last month Retail Sales Core came out at 0.5 vs 0.6 expected, and the headline came out at -0.2 vs +0.1 expected, and we saw about 12 pip spike on USD/CAD, followed by additional 8 pip move for a total of 20 pip move within first 10 minutes. Pretty good.

Two months ago it came out at -0.5 vs +0.5 expected, and we saw about 10 pips spike followed by additional 15 pip move.

However, for so many months in a row we didn't see significant deviations and spikes so I don't want to make any recommendations until I see this report performing well.

It's good to know not only when to enter a trade but also when stay away. When it comes to news trading, we are looking for high probability trades.

SUPPORT      : Weekly 1,006  ,  Daily 1, 015  ,  Hourly  1,0205

RESISTANCE  : Weekly 1,0315  , Daily 1,0275  , Hourly 1,0235

UK MPC Meeting Minutes

May 23, 2012

MPC Meeting Minutes is scheduled to 

released today and since it´s customary for BOE (Bank of England) not to release a statement along with its interest rate decision (2 weeks ago) if there were no changes to either rate decision or APF (Asset Purchasing Facility, UK´s quantitative easing program); today will be the first time for a glimpse into what took place during this meeting, here is the forecast:

4:30am NY Time UK MPC Minutes
Rate Forecast 0-0-9 Previous 0-0-9
APT Forecast 0-1-8  Previous 0-1-8

DEVIATION: 2 Votes (BUY GBP on 2 votes of rate hike / SELL GBP on 2 votes of APT increase) 

Definition
The MPC meets every month to set the interest rate. Throughout the month, the MPC receives extensive briefing on the economy from Bank of England staff. This includes a half-day meeting known as the pre-MPC meeting which usually takes place on the Friday before the MPC’s interest rate setting meeting. The nine members of the Committee are made aware of all the latest data on the economy and hear explanations of recent trends and analysis of relevant issues. The Committee is also told about business conditions around the UK from the Bank’s Agents. The Agents’ role is to talk directly to business to gain intelligence and insight into current and future economic developments and prospects.
The monthly MPC meeting itself is a two-day affair. On the first day, the meeting starts with an update on the most recent economic data. A series of issues is then identified for discussion. On the following day, a summary of the previous day’s discussion is provided and the MPC members individually explain their views on what policy should be. The Governor then puts to the meeting the policy which he believes will command a majority and members of the MPC vote. Any member in a minority is asked to say what level of interest rates he or she would have preferred, and this is recorded in the minutes of the meeting. The interest rate decision is announced at 12 noon on the second day.


Update (May 22, 2012)BOE Posen has been very outspoken during the last couple of weeks following the MPC Meeting. He started by saying that he voted for more stimulus before he voted against stimulus last week, to further stimulus “might be needed”, to BOE member should consider more stimuli in the future.  Add to that sentiment, IMF today called UK out to consider further stimulus if situation warrants it, and considering the slightly worse than expected CPI release (3.0% headline and 2.1% core), it is likely that market may speculate some discussion over increasing the APT during last meeting to Posen possibly switched his vote back to more stimulus… Either way, GBP should be under pressure pre-news, although market may go either way after the release…

The Trade PlanWe will be looking at the vote count today but because of the current economic situation in UK and the uncertainty of the overall market view on Sterling, I’d recommend to sit on the sideline or follow me in the traderoom to trade this release. Due to the nature of this release, you need to have a newswire or audio service in order to trade it. If we see a steady market reaction after the release, it may very well carry over to the NY Session, therefore I’d wait for 5 minutes before even deciding on a trade. If market moves steadily, then I will use the double-fibonacci method and follow that trend.

BOOKS


ACH15® Discovery: always 100% won transactions in FOREX market! - florin iacob- EUR 115,34



EUR/GBP in a Nutshell: A Simple Guide on How to Trade the EUR/GBP in the Forex Market - Elena Sanchez - EUR 7,68

 

US Existing Home Sales

May 22, 2012

US Existing Home Sales is expected to rise slightly from the previous month as current foreclosure rate is still remaining resiliently high. Here’s the forecast:
10:00am Existing Home Sales Forecast 4.64M Previous 4.48M
DEVIATION: 0.4M / 400K (BUY USD 5.00M / SELL USD 4.20M)



Definition:“Measures the annualized number of existing residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation’s currency because large purchases tend to be made by consumers that are optimistic and confident in their financial position. The sale of a home also triggers commissions for real estate agents, and often home owners will purchase goods such as appliances and furniture shortly after purchasing a home. Traders watch this report closely as it’s the month’s first demand-side housing indicator to be released.”


The Trade PlanBecause the Housing sector is one of the most foundamental components of the U.S. economy, this release will certainly cause some volatility in the market, especially if our tradable figures (+/- 400K) were hit. With the focus of world on the status of U.S. housing sector, this release may bring about a strong sentiment of risk appetite/aversion if our BUY/SELL trigger is hit…
If our buy tradable deviation is hit, or 5.00M figure is released, we should look to BUY USD after the release. If our sell tradable deviation is hit, or 4.20M figure is released, we should look to SELL USD.

Primary currency pair:   EURUSD or USDJPY.


BOOKS   




Currency Trading in the Forex and Futures Markets - Carley Garner - EUR 28,74



Getting Started in Forex Trading Strategies - Michael Duane Archer - EUR 16,12


The Little Book of Currency Trading: How to Make Big Profits in the World of Forex (Little Books. Big Profits) - Kathy Lien - EUR 12,62



Forex Strategy 10: Low Risk/High Return Currency Trading - ROB BOOKER - EUR 0,89

     

                           

UK CPI

May 21, 2012

We´ll be trading the UK Consumer Price Index (CPI) release at 4:30am NY Time today. We´ll be looking at the yearly release figure and the market could react with lots of volatility as CPI is the basic measurement of Inflation, therefore expect to see more exaggerated moves if we get a huge surprise release. Here is the forecast: 

4:30am NY Time UK CPI y/y Forecast 3.1% Previous 3.5%
DEVIATION: 0.3% (BUY GBP 3.5% / SELL GBP 2.8%

Definition“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households Wikipedia).” It is also known as the “True Cost of Living”.


The Trade PlanWe are looking for a variable deviation of 0.3%. If the Inflation number remained above 3.5%, which is beyond BOE´s inflation target, we will BUY GBP. If the Inflation number decreases to 2.8% or less, we´ll look to SELL GBP. Historically, even with a slight difference of 0.1%, market usually overreacts.

 If our deviation is hit, there is a strong possibility that the market will move 50 pips immediately.

Primary currency pair: GBP/USD  ; EUR/GBP ; GBP/JPY
Forecast: 3.1
Previous: 3.5
LT1 (Lower Trigger 1): --- [SELL]
UT1 (Upper Trigger 1): --- [BUY]

For UK CPI y/y: based on 30 estimates, median estimate is 3.1% and the average estimate is 3.1%. The highest estimate is 3.4% (one estimate) then 3.3% (four estimates). The lowest estimate is 2.7% (two estimatea) and then at 2.8 and 2.9% (one estimate each). One standard deviation is +/- 0.2%.

Unfortunately, we haven't seen any deviations on this report for a few months in a row so it's hard to estimate what triggers would work and what triggers wouldn't. I think +/- 0.3 deviation may be worthy to give a try but very fast retracement may also happen. I would personally stay away from this report until I see it performing again.

+/- 0.3 deviation happened a few times in the past but of course chances for a trade are a bit low.

Last month it came out at 3.5 vs 3.4 expected, and we didn't see a spike.

Two months ago it almost came as expected so it was a no trade.

Then in next three months in a row it came out exactly as expected so it was a no trade.

Six months ago we had deviations of 0.1 and really no price action.

Seven months ago UK CPI y/y came out at 5.2 vs 4.9 expected but we saw only about 30 pip spike. Nothing special but not a losing trade either.

Eight months ago both CPI m/m and y/y came out as expected so it was a no trade.

Nine months ago we had just +0.1 deviation on both UK CPI y/y and m/m, and we saw about 25 pip spike with GBP/USD eventually going higher and higher. Not bad price action but it was a no trade anyway.

Ten months ago UK CPI y/y came out at 4.2 vs 4.5 expected ( -0.3 deviation), and CPI m/m came out at -0.1 vs +0.2 expected (also -0.3 deviation), and GBP/USD spiked down by over 60 pips. However, we shortly saw about 50% retracement, and within 30 minutes GBP/USD was back to the prerelease price.

Eleven months ago it came out exactly as expected so it was a no trade.

Twelve months ago CPI y/y came out at 4.5 vs 4.1 expected (+0.4 deviation), and CPI m/m came out at +1.0 vs 0.7 expected (+0.3 deviation), and we saw about 50 pip move on GBP/USD.

Thirteen months ago UK CPI y/y came out at 4.0 vs.

BOOKS   


ACH15® Discovery: always 100% won transactions in FOREX market! - florin iacob - EUR 115,34


Attacking Currency Trends: How to Anticipate and Trade Big Moves in the Forex Market (Wiley Trading Series) - Greg Michalowski - EUR 39,52


Sentiment in the Forex Market: Indicators and Strategies to Profit from Crowd Behavior and Market Extremes (Wiley Trading) - Jamie Saettele - EUR 50,07

Forex Market Review Week (May 21 ~ 25, 2012)

EURO may linger around the current levels with 1.2600 in sight, although some consolidation may take place pending on more negative news out of EU.  With the Greek election scheduled for mid June, unless we get unexpected news out of Europe, EURUSD could remain range bound, therefore I’d be looking to SELL on Rally, with the keyword being Rally.  GBP is likely to weaken further on Posen’s recent comments, we should pay attention to the MPC Minutes as a change of his vote again would be very bad for Sterling. JPY will remain strong and may even push USDJPY to the 78.00 levels unless BOJ steps up its rhetoric and take action.  Market is apparently optimistic over recent data out of Japan. CAD is likely to be driven by USD strength but should correct itself soon, it is probably best to stay out of CAD as its fundamental is diverging with its demand… I would ultimately expect stronger CAD, but not in the face of risk aversion and safe-haven demands. AUD and NZD are likely to remain weak, although some consolidation over recent losses may take place.  With China once again desperately trying to avoid a “hard” landing, AUD and NZD may find some support, but in this risk aversion driven market, I would still sell them on rallies.  CHF is likely to remain weak against USD and JPY, but neutral against other majors as SNB manipulate the Euro peg.  USD will remain slightly bullish, and may take a backseat and let JPY be the strongest majors this week… however, I wouldn’t underestimate USD that any sudden negative news out of Europe should help to boost USD strength across the board once again.

Canada Employment Change

May 11, 2012 – Forex News Trading

We´ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:
8:30am (NY Time) CAD Employment Change Forecast 13K Previous 82.3k
Unemployment Rate 7.3%
DEVIATION: 25K (BUY CAD 40K /  SELL CAD @ -10K)


The Trade Plan


The Canadian Employment Change report will be released at 8:30am sharp today (changed from the usual 7:00am). What I am looking for is a minimum deviation of around 25K, or the difference between the Forecast number (13K) versus the actual release number; if we get a positive 40K of release, we should see demand for the CAD rise, therefore we should BUY CAD against weaker currencies at the time; however, if we get a negative deviation, such as -10K or worse, we should see some weakness in the CAD, and that will be my cue to SELL CAD against stronger currencies at the time.
I´ll also pay close attention to the unemployment rate, which is expected  to drop at 7.3%. As long as this number does not conflict with the Employment Changes, we should follow the direction of the news release. If we get a conflict, such as better Employment Changes but higher Unemployment Rate, then we´ll need to look at the context of the market before taking the trade. 


DEFINITION“Measures the change in number of employed people during the previous month. A rising trend has a positive effect on the nation´s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises

Following four months of little change, employment increased by 82,000 in March, mostly in full-time work. This brought the unemployment rate down 0.2 percentage points to 7.2%.

Compared with 12 months earlier, employment was up 1.1% or 197,000. Almost all of this growth was in full-time employment, up 181,000 (+1.3%), while part-time employment edged up. The total number of hours worked rose 1.6% over the same period.

Good for currency; USDCAD will tend to go down.