1. Thursday March 4, 2010 (7:00am NY Time) UK
BOE Rate Decision Forecast 0.50% Previous 0.50%
UK's BOE, Bank of England's Monetary Policy Committee (MPC) is once
again scheduled to release their interest rate decision today and
the expectations are to keep both their official rates at 0.50% and
APF (Asset Purchasing Facility) at 200 Billion Pound (at least for
the time being). The important focus as usual today will be the
accompanying BOE Statement if they decide to release one.
Since last Parliament testimony by BOE officials, including Governor
Melvyn King, Sterling has been under pressure as the outlook of UK's
economy was grim to say the least. With Greece out of the European
nations casting spotlight on debt issues, UK's own debt is also
under scrutiny as we saw the heavy depreciation of the Sterling
since last rate decision back in Feb. 4.
If the BOE Statement focus on the same rhetoric of late, i.e. the
negative outlook on UK's economy, expect to see a sell-off of GBP
once again.
2. Thursday March 4, 2010 (7:45am NY Time) EU
ECB Rate Decision Forecast 1.00% Previous 1.00%
ECB (European Central Bank) is likely to once again leave its
minimum bid rate at 1.00% or unchanged this month. The majority of
analysts agree to this sentiment as according to ECB, it is will
keep rates unchaged until 2011.
Euro Zone is still plagued with the imbalanced economic recovery of
its member countries, especially Greece, Spain, Portugal, and Italy...
As a matter of fact, even with the Austerity Measures issued by
Greece yesterday, the risk of a sovereign default is still possible.
With the current market still showing a weaker EUR against the USD
as the current market unable to stay above the 1.3700 at the time of
writing this analysis, we could see another renewed sense of EUR
sell-offs later on today.
However, as ECB rate decisions are concerned, generally ECB is not
in the habit of surprising the market because any surprise on the
world's most traded currency pair (EUR/USD) would upset economy,
therefore I expected everything to be released as expected... The real
mover will be the press conference hosted at 8:30am (in 45 minutes)
by ECB Trichet, which may shed some new light over ECB's monetary
policy.
Of course, I suggest that we stick around during the release just in
case ECB decides to surprise the market, but most likely we won't
see much of a market volatility.
Thursday, March 4, 2010
Friday, February 5, 2010
forex for TODAY and TOMORROW
NEWS TRADING (By Henry Liu)
1. Friday February 5, 2010 (7:00am NY Time) CA
Employment Changes Forecast 15.2K Previous -2.6K
Unemployment Rate Forecast 8.5% Previous 8.5%
If the employment number is higher, we would SELL USD/CAD, and if
the employment number is lower, we would BUY USD/CAD. This news
indicator measures the numbers of new jobs created during the
previous month, however in this case, we will see how many jobs were
actually lost, and less negative numbers mean better economy.
Our surprise factor will be at least 30K. Historically, it has
moved the market by at least 50 pips if the surprise factor is hit
by at least 80% of the time.
2. Friday February 5, 2010 (8:30am NY Time) US
NonFarm Payroll Forecast 10K Previous -85K
Unemployment Rate Forecast 10% Previous 10%
We'll be trading the NFP release today, which is expected at +10K
with a previous release of -85K; if you remember what happened last
NFP, you'd know that the last release disappointed the market and
kept USD under pressure for the better part of the months as after
a revision of November NFP to a positive number, the December
release brought back concerns over the rate of economic recovery.
At the time of writing this analysis, market is in full risk
aversion mode.
With the forecast on NFP turning positive for the first time, we
could see a bullish sentiment on the USD as a result of market
psychology. However, there are several things that we need to
consider for tomorrow's NFP release.
First of all, there is a possible increase in the total jobs count
as the Obama administration hired over 550K temporary workers for
the national census. Should this number make in the January 2010
count, expect to see a blow out positive number in the NFP release
and a possible 1.0% decrease in the unemployment rate.
Secondly, the BLS or Bureau of Labor Statistics will release its
annual benchmark revision for the payrolls. Expect to see a
significant downward revision on the first quarter of 2009, which
may offset the NFP release numbers all together if the revision is
significant.
Therefore, let's talk about how to trade this release: We'll wait
for the numbers to come out, but will not take any trade YET, even
if we get our tradable figures (-60K or 80K). We'll wait for a
possible revision to the previous release number, which is -85K, as
the market usually overreacts with the Revision and chances favor
for this trade to work out if we do not get conflicting releases
between the revision and the actual release; then we will wait for
the Benchmark Revision... at this point, still stay out of the market.
Then the next step is to wait for the Unemployment Rate, which is at
10.0%. If the Unemployment Rate were to surprise higher, we'll have
to really make an executive decision at the time of the release and
see what is the primary focus of traders. As long as we don't
surprise the 10.5%, I think the market will probably pay more
attention to the NFP release. Of course if the census workers were
to be included in this release, then expect to have a much lower
than expected unemployment rate...
After all of the numbers have been released. Wait for the market to
push... then be patient and wait for a decent retracement before
getting in. Look for recent support/resistance areas for entry as a
high impact news with various components will usually be extremely
volatile, and those who are patient will always get a chance to
enter at much better entry.
DEFINITION
"Measures the change in number of employed people during the
previous month, excluding the farming industry. 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."
1. Friday February 5, 2010 (7:00am NY Time) CA
Employment Changes Forecast 15.2K Previous -2.6K
Unemployment Rate Forecast 8.5% Previous 8.5%
If the employment number is higher, we would SELL USD/CAD, and if
the employment number is lower, we would BUY USD/CAD. This news
indicator measures the numbers of new jobs created during the
previous month, however in this case, we will see how many jobs were
actually lost, and less negative numbers mean better economy.
Our surprise factor will be at least 30K. Historically, it has
moved the market by at least 50 pips if the surprise factor is hit
by at least 80% of the time.
2. Friday February 5, 2010 (8:30am NY Time) US
NonFarm Payroll Forecast 10K Previous -85K
Unemployment Rate Forecast 10% Previous 10%
We'll be trading the NFP release today, which is expected at +10K
with a previous release of -85K; if you remember what happened last
NFP, you'd know that the last release disappointed the market and
kept USD under pressure for the better part of the months as after
a revision of November NFP to a positive number, the December
release brought back concerns over the rate of economic recovery.
At the time of writing this analysis, market is in full risk
aversion mode.
With the forecast on NFP turning positive for the first time, we
could see a bullish sentiment on the USD as a result of market
psychology. However, there are several things that we need to
consider for tomorrow's NFP release.
First of all, there is a possible increase in the total jobs count
as the Obama administration hired over 550K temporary workers for
the national census. Should this number make in the January 2010
count, expect to see a blow out positive number in the NFP release
and a possible 1.0% decrease in the unemployment rate.
Secondly, the BLS or Bureau of Labor Statistics will release its
annual benchmark revision for the payrolls. Expect to see a
significant downward revision on the first quarter of 2009, which
may offset the NFP release numbers all together if the revision is
significant.
Therefore, let's talk about how to trade this release: We'll wait
for the numbers to come out, but will not take any trade YET, even
if we get our tradable figures (-60K or 80K). We'll wait for a
possible revision to the previous release number, which is -85K, as
the market usually overreacts with the Revision and chances favor
for this trade to work out if we do not get conflicting releases
between the revision and the actual release; then we will wait for
the Benchmark Revision... at this point, still stay out of the market.
Then the next step is to wait for the Unemployment Rate, which is at
10.0%. If the Unemployment Rate were to surprise higher, we'll have
to really make an executive decision at the time of the release and
see what is the primary focus of traders. As long as we don't
surprise the 10.5%, I think the market will probably pay more
attention to the NFP release. Of course if the census workers were
to be included in this release, then expect to have a much lower
than expected unemployment rate...
After all of the numbers have been released. Wait for the market to
push... then be patient and wait for a decent retracement before
getting in. Look for recent support/resistance areas for entry as a
high impact news with various components will usually be extremely
volatile, and those who are patient will always get a chance to
enter at much better entry.
DEFINITION
"Measures the change in number of employed people during the
previous month, excluding the farming industry. 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."
Wednesday, February 3, 2010
MAKE YOUR MONEY, NOW ! ! !
We're going to skip the NZ Employment Changes release today because
it is not a tradable report as per historical track record, plus
of the liquidity condition in the market, its probably best to
stay out.
***
NEWS TRADING
Wednesday February 3, 2010
[4:30am NY Time]
UK Services PMI BUY 58.6 SELL 54.6 GBP/USD
We will be focusing on the Services PMI figure today and our minimum
deviation is 2.0 from the forecast release figure. If we get at
least 58.6 or better, we could see some demand in the GBP and we
will consider BUYING GBP/USD or GBP/JPY pairs. If we get a 54.7 or
worse release, GBP could weaken and we should look to SELL GBP/USD
or GBP/JPY pairs.
Because PMI's are leading indicators and are likely to set the tone
for January 2010 for GBP, especially the Services PMI's as from UK
since UK's economy is 72% services based; therefore traders look at
this release for early direction in UK's economy. However, keep in
mind that the GBP is under pressure from a stronger USD and general
risk aversion sentiment, therefore my bias is towards selling GBP.
Definition:
"The Chartered Institute of Purchasing and Supply (CIPS) Services
Purchasing Manager's Index (PMI) measures the activity level of
purchasing managers in the services sector, with a reading above 50
indicating expansion. A rising trend has a positive effect on the
nation's currency. To produce the index, purchasing managers are
surveyed on a number of subjects including employment, production,
new orders, supplier deliveries, and inventories. Traders watch
these surveys closely because purchasing managers, by virtue of
their jobs, have early access to data about their company's
performance, which can be a leading indicator of overall economic
performance."
[8:15am NY Time]
US ADP NFP BUY 50K SELL -100K USD/JPY
Our focus will be on the ADP NFP Employment Release once again
today, and because ADP is the largest private payroll processing
providers in the U.S., traders tend to pay more focus to this
release. ADP releases its version of Non-Farm Payroll numbers about
2 days before the actual NFP based on it's proprietary data. About
80% of the time ADP's release will go in tandem with the official
NFP, but the for the 20% of the exceptions, we'd get figures that
could be totally off from the official NFP forecast.
This is of course an excellent indicator for the general risk
sentiment of the market as U.S. Employment situation is a global
concern; and of course this release sometimes serves as a preview of
the NFP on Friday; if the numbers comes out as a surprise of at
least 70K more or less from the Forecast of -31K, we should look to
trade in the direction of the surprise.
As I usually don't trade the ADP figure but rather use this release
as a reference for future market trend; however, I assume that most
investors are likely to do the same, but if the deviation of 70K is
actually hit, true speculators will probably have not problem
jumping into the market, and this will undoubtedly change market
perception on Friday's NFP release, therefore it is best to be
around your computer during the release time rather than finding out
what happened hours later and perhaps missed the entire movement.
[10:00am NY Time]
US ISM Non-Manufacturing PMI BUY 53.5 SELL 48.5 USD/JPY
We'll be looking to trade the ISM Non-Manufacturing PMI, or better
known as the Services PMI; it is a leading indicator of the nation's
Services sector, as many investors look at this release for
immediate directional preferences on the future of the economy.
With the current analyst's expectation above the 50 level at 51.1,
in the event that 53.5 is reached, we could see USD strength
returning to the market as JPY weakens across the board; however, if
the opposite is true, or 48.5 figure is released, expect to see
stronger JPY and possibly risk aversion driven market.
If our tradable releases are reached, there is a good expectation of
50 pips of market movement within the next 120 minutes on both
USD/JPY and EUR/USD pairs, among other USD crosses. I'll be looking
to trade USD/JPY on a worse than expected release as USD/JPY may
show more of a decline, and sell EUR/USD on a better release as
EUR/USD may break the current support areas and breakout to the
downside... Of course, it's important to consider the entire context
of the market when trading.
DEFINITION:
"The Institute of Supply Management (ISM) Non-Manufacturing Index
measures the activity level of purchasing managers in the services
sector, with a reading above 50 indicating expansion. A rising trend
has a positive effect on the nation's currency. To produce the
index, purchasing managers are surveyed on a number of subjects
including employment, production, new orders, supplier deliveries,
and inventories. Traders watch these surveys closely because
purchasing managers, by virtue of their jobs, have early access to
data about their company's performance, which can be a leading
indicator of overall economic performance."
[7:30pm NY Time]
AU Retail Sales BUY 0.9% SELL -0.3% AUD/USD
We'll be focusing once again today on the Australian Retail Sales
m/m release and we are looking for a deviation of 0.6% from the
forecast release of 0.3%. If we get a 0.9% or -0.3%, we'd get in
either on a LONG or SHORT trade depending on the release with a high
probability of seeing the market move over 50 pips in the next 2
hours.
The Australian Dollar has been declining since the past 2 weeks, and
with yesterday's RBA decision to keep rates unchanged, the
fundamental bullish outlook of AUD was also changed to a more
neutral stance. Therefore, with this Retail Sales we could see some
volatility in the AUD in either direction, as the long term bias for
LONG AUD is at a crucial point.
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."
(Special Message on Fundamental News Trading)
My Mentoring Service Registration has been officially closed. I'd
like to take this time and say "Thanks" for your support and
tolerance doing the past few days of the relaunch. From this moment
on I'm going to get back to the basics and dedicate my time in doing
what I do best, trade and teach my subscribers becoming successful
traders!
And of course, this newsletter service and video recording will
continue and I'll posting my videos and trades on my blog,
therefore don't forget to visit my website and my blog when you have
it is not a tradable report as per historical track record, plus
of the liquidity condition in the market, its probably best to
stay out.
***
NEWS TRADING
Wednesday February 3, 2010
[4:30am NY Time]
UK Services PMI BUY 58.6 SELL 54.6 GBP/USD
We will be focusing on the Services PMI figure today and our minimum
deviation is 2.0 from the forecast release figure. If we get at
least 58.6 or better, we could see some demand in the GBP and we
will consider BUYING GBP/USD or GBP/JPY pairs. If we get a 54.7 or
worse release, GBP could weaken and we should look to SELL GBP/USD
or GBP/JPY pairs.
Because PMI's are leading indicators and are likely to set the tone
for January 2010 for GBP, especially the Services PMI's as from UK
since UK's economy is 72% services based; therefore traders look at
this release for early direction in UK's economy. However, keep in
mind that the GBP is under pressure from a stronger USD and general
risk aversion sentiment, therefore my bias is towards selling GBP.
Definition:
"The Chartered Institute of Purchasing and Supply (CIPS) Services
Purchasing Manager's Index (PMI) measures the activity level of
purchasing managers in the services sector, with a reading above 50
indicating expansion. A rising trend has a positive effect on the
nation's currency. To produce the index, purchasing managers are
surveyed on a number of subjects including employment, production,
new orders, supplier deliveries, and inventories. Traders watch
these surveys closely because purchasing managers, by virtue of
their jobs, have early access to data about their company's
performance, which can be a leading indicator of overall economic
performance."
[8:15am NY Time]
US ADP NFP BUY 50K SELL -100K USD/JPY
Our focus will be on the ADP NFP Employment Release once again
today, and because ADP is the largest private payroll processing
providers in the U.S., traders tend to pay more focus to this
release. ADP releases its version of Non-Farm Payroll numbers about
2 days before the actual NFP based on it's proprietary data. About
80% of the time ADP's release will go in tandem with the official
NFP, but the for the 20% of the exceptions, we'd get figures that
could be totally off from the official NFP forecast.
This is of course an excellent indicator for the general risk
sentiment of the market as U.S. Employment situation is a global
concern; and of course this release sometimes serves as a preview of
the NFP on Friday; if the numbers comes out as a surprise of at
least 70K more or less from the Forecast of -31K, we should look to
trade in the direction of the surprise.
As I usually don't trade the ADP figure but rather use this release
as a reference for future market trend; however, I assume that most
investors are likely to do the same, but if the deviation of 70K is
actually hit, true speculators will probably have not problem
jumping into the market, and this will undoubtedly change market
perception on Friday's NFP release, therefore it is best to be
around your computer during the release time rather than finding out
what happened hours later and perhaps missed the entire movement.
[10:00am NY Time]
US ISM Non-Manufacturing PMI BUY 53.5 SELL 48.5 USD/JPY
We'll be looking to trade the ISM Non-Manufacturing PMI, or better
known as the Services PMI; it is a leading indicator of the nation's
Services sector, as many investors look at this release for
immediate directional preferences on the future of the economy.
With the current analyst's expectation above the 50 level at 51.1,
in the event that 53.5 is reached, we could see USD strength
returning to the market as JPY weakens across the board; however, if
the opposite is true, or 48.5 figure is released, expect to see
stronger JPY and possibly risk aversion driven market.
If our tradable releases are reached, there is a good expectation of
50 pips of market movement within the next 120 minutes on both
USD/JPY and EUR/USD pairs, among other USD crosses. I'll be looking
to trade USD/JPY on a worse than expected release as USD/JPY may
show more of a decline, and sell EUR/USD on a better release as
EUR/USD may break the current support areas and breakout to the
downside... Of course, it's important to consider the entire context
of the market when trading.
DEFINITION:
"The Institute of Supply Management (ISM) Non-Manufacturing Index
measures the activity level of purchasing managers in the services
sector, with a reading above 50 indicating expansion. A rising trend
has a positive effect on the nation's currency. To produce the
index, purchasing managers are surveyed on a number of subjects
including employment, production, new orders, supplier deliveries,
and inventories. Traders watch these surveys closely because
purchasing managers, by virtue of their jobs, have early access to
data about their company's performance, which can be a leading
indicator of overall economic performance."
[7:30pm NY Time]
AU Retail Sales BUY 0.9% SELL -0.3% AUD/USD
We'll be focusing once again today on the Australian Retail Sales
m/m release and we are looking for a deviation of 0.6% from the
forecast release of 0.3%. If we get a 0.9% or -0.3%, we'd get in
either on a LONG or SHORT trade depending on the release with a high
probability of seeing the market move over 50 pips in the next 2
hours.
The Australian Dollar has been declining since the past 2 weeks, and
with yesterday's RBA decision to keep rates unchanged, the
fundamental bullish outlook of AUD was also changed to a more
neutral stance. Therefore, with this Retail Sales we could see some
volatility in the AUD in either direction, as the long term bias for
LONG AUD is at a crucial point.
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."
(Special Message on Fundamental News Trading)
My Mentoring Service Registration has been officially closed. I'd
like to take this time and say "Thanks" for your support and
tolerance doing the past few days of the relaunch. From this moment
on I'm going to get back to the basics and dedicate my time in doing
what I do best, trade and teach my subscribers becoming successful
traders!
And of course, this newsletter service and video recording will
continue and I'll posting my videos and trades on my blog,
therefore don't forget to visit my website and my blog when you have
FOREX TIPS FOR SERIOUS TRADERS
4:30am UK Services PMI 56.6(E) 56.8(P) 2(S) 50M
8:15am US ADP NFP -31K(E) -84K(P) 70K(S) 50M
10:00am US ISM Non-Manuf. 51.1(E) 49.8(P) 2.5(S) 50M
7:30pm AU Retail Sales 0.3%(E) 1.4%(P) 0.6%(S) 50M
8:15am US ADP NFP -31K(E) -84K(P) 70K(S) 50M
10:00am US ISM Non-Manuf. 51.1(E) 49.8(P) 2.5(S) 50M
7:30pm AU Retail Sales 0.3%(E) 1.4%(P) 0.6%(S) 50M
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