7 Best ways to profit from Currency Strength Meter

Posted by Henry Liu on March 10, 2010 under Currency Trading Tips, Forex News Trade, General | Be the First to Comment

I get asked a lot about my Currency Strength Meter and some of the best ways to use it.  I made a short video (26 minutes) covering the 7 ways that I use my meter and I hope it will spark a new idea in your trading or point you to a new direction as you use my Strength Meter later on tonight.

http://www.newsprofiteer.com/currency-strength-meter-best-usage.html

I’d like to encourage you to leave a comment on my blog and share some other ways that you are currently using my meter, I’ll review your comments and incorporate them in my next Strength Meter usage video.

SNB Swiss Libor Rate 03/11/2010

Posted by Henry Liu on under Forex News Trade, Switzerland | Be the First to Comment

8:00am NY Time CHF LIBOR Rate    Forecast 0.25%    Previous 0.25%
ACTION:  n/a

SNB usually issues a target range of 1.00% on the 3-month short term Libor rate, or London Interbank Offered Rate, during this decision and the actual rate is the midpoint of the target, unless otherwise specified. 

SNB is going to keep the 3-month libor rate at the current target level of 0.25%, as agreed by most analysts, and as a matter of fact, analysts agree that SNB will keep rates unchanged until mid 2010.  As SNB is not in the habit of  shocking the market, it is practically impossible for SNB to hike rates unexpectantly.

Australia Employment Change 03/10/2010

Posted by Henry Liu on March 9, 2010 under AUD Employment Change, Australia, Forex News Trade | Be the First to Comment

7:30pm (NY Time) AU Employment Change    Forecast 15.3K    Previous 52.7K
ACTION: AUD/USD        BUY 45K         SELL -15K

We’ll be focusing on the Australian Employment Change release today as this news release is similar to US Nonfarm Payroll Changes, but for Australia.  This release is considered as a high impact report as the job’s market have a direct influence over the entire economy, which in turn affects inflation, and inflation will affect future RBA monetary policy.  If the actual release is better, it would be good for AUD and we would be looking to BUY AUD/USD, if the actual release is worse, it would be bad for AUD and we should be looking to SELL AUD/USD.

RBNZ Official Cash Rate Decision 03/10/2010

Posted by Henry Liu on under Forex News Trade, NZD Interest Rate, New Zealand | Be the First to Comment

3:00pm (NY Time)  RBNZ Rate Decision   Forecast 2.50%    Previous 2.50%
ACTION: NZD/USD        BUY 2.75%     SELL Unchanged

RBNZ is expected to keep rates unchanged at the current level of 2.50% in this meeting, as unanimously agreed by all economists surveyed from different news media companies.  As a matter of fact, aside from the bullish statement and hawkish tone during previous RBNZ rate statements from Governor Bollard, there seems to be no other fundamental reasons supporting a rate hike for NZD in the near future.

US Nonfarm Payroll NFP Employment Change 03/05/2010

Posted by Henry Liu on March 4, 2010 under Forex News Trade, US Non-Farm Payroll, USA | 2 Comments to Read

8:30m (NY Time) US NFP      Forecast -56K       Previous -20K  (Unemployment Rate 9.8%)
ACTION:        SELL -120K USD/JPY                 BUY 20K USD/JPY

We’ll be focusing on the NFP release today, which is expected at -56K with a previous release of -20K; if you remember what happened last NFP, you’d know that the market reacted to the NFP with an initial risk appetite sentiment as the Unemployment Rate went down to 9.7% (10.0% expected), but turned into risk aversion as both benchmark revision and actual release figures brought concerns over the recovery (or lack of) in the job’s market…

Canada IVEY PMI 03/04/2010

Posted by Henry Liu on March 3, 2010 under CAD Ivey PMI, Canada, Forex News Trade | 3 Comments to Read

10:00am (NY Time) CA IVEY PMI      Forecast 56.0    Previous 50.8
ACTION:  USD/CAD    SELL 55.5    BUY 49.0

We’ll be trading the IVEY PMI from Canada today, it is the equivalent of both ISM PMI’s out of US where purchasing managers of all sectors of the economy participate in this survey.  And as with PMIs, they are all considered as leading indicators with the medium point at 50, therefore a reading of  above 50 would be considered as expansion in the economy whereas a reading below 50 would be considered as contraction in the economy.

FOREX ECB Trichet Press Conference 03/04/2010

Posted by Henry Liu on under EUR ECB Press Conference, Europe, Forex News Trade | Be the First to Comment

8:30am NY Time ECB Chairman Trichet Press Conference
ACTION: N/A

We’ll be focusing on the ECB (European Central Bank) Chairman Jean-Claude Trichet press conference today as he releases an official statement from ECB regarding the official Interest Decision, followed with a brief Q&A Session… Here is an overview of the situation

ECB Minimum Bid Rate Decision 03/04/2010

Posted by Henry Liu on under EUR ECB Interest Rate, Europe, Forex News Trade | Be the First to Comment

7:45am (NY Time) EU ECB Rate Decision  Forecast 1.00%  Previous 1.00%
ACTION: EUR/USD       N/A

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.

UK BOE Official Bank Rate Decision 03/04/2010

Posted by Henry Liu on under Forex News Trade, Great Britain, UK Interest Rate | Be the First to Comment

7:00am (NY Time) UK Offcial Bank Rate Decision  Forecast 0.50%   Previous 0.50%
ACTION: GBP/USD      N/A

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.

US ISM Non-Manufacturing PMI 03/03/2010

Posted by Henry Liu on March 2, 2010 under Forex News Trade, US ISM Manufacturing, USA | Be the First to Comment

10:00am NY Time  US ISM Non-Manufacturing PMI     Forecast 51.0  Previous 50.5
ACTION:   BUY 53.5     SELL 48.5      USD/JPY

We’ll focusing on the ISM Non-Manufacturing PMI today, or better known as the U.S.  Services PMI, and as all Purchasing Manager’s Indexes, 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 51.0, in the event that 53.5 is reached, we could see some USD strength and JPY weakness; however, if the opposite is true, or 48.5 figure is released, expect to see stronger JPY and possibly risk aversion driven market.

US ADP NFP Nonfarm Payroll 03/03/2010

Posted by Henry Liu on under Forex News Trade, US ADP NFP Changes, USA | Be the First to Comment

8:15am NY Time US ADP NFP Change      Forecast -15K     Previous -22K
ACTION: USD/JPY       BUY +55K         SELL -85K

We’ll be looking for a trading opportunity on the ADP NFP Employment Release today, and because ADP is the largest private payroll processing provider 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.

UK Services PMI 03/03/2010

Posted by Henry Liu on under Forex News Trade, Great Britain, UK Services PMI | Be the First to Comment

4:30am (NY Time) UK Services PMI     Forecast 55.0     Previous 54.5
ACTION: GBP/USD                        BUY 57.0         SELL 53.0

We’ll be trading the Services PMI figure today out of UK and our minimum deviation is 2.0 from the forecast release figure.  If we get at least 57.0 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 53.0 or worse release, GBP could weaken and we should look to SELL GBP/USD or GBP/JPY pairs.

Australia GDP q/q 03/02/2010

Posted by Henry Liu on March 1, 2010 under AUD GDP q/q, Australia, Forex News Trade | Be the First to Comment

7:30pm (NY Time) AU GDP q/q     Forecast 0.9%    Previous 0.2%
ACTION: AUD/USD      BUY 1.2%        SELL 0.6%

We’ll be looking for a trading opportunity from the quarterly GDP release today out of Australia, which is expected by analysts expectation from Bloomberg to be at 0.9%.  As Australia’s GDP number has maintained on the positive side for the last couple of quarters, this release number will probably not have a trend changing impact on the AUD unless it’s a negative number or flat (0.0%) release.

Canada BOC Overnight Rate 03/02/2010

Posted by Henry Liu on under CAD Interest Rate, Canada, Forex News Trade | Be the First to Comment

9:00am (NY Time) CA BOC Rate Decision   Forecast 0.25%      Previous 0.25%
ACTION:  USD/CAD  Depend on Market Condition

BOC (Bank of Canada) will be issuing its Overnight Rate decisions once again today and this meeting will be watched by traders and speculators since interest rate policy serves as a tool to curb inflation and maintain price stability, making this news event probably the most important event for the day.

This is what I wrote for the last two BOC rate decision, I think the situation still remains mostly unchanged:

RBA Cash Rate decision 03/01/2010

Posted by Henry Liu on under AUD Interest Rate, Australia, Forex News Trade | 3 Comments to Read

10:30pm (NY Time) AU RBA Rate Decision     Forecast 4.00%    Previous 3.75%
ACTION: AUD/USD         SELL 3.75%           AUD/USD

Reserve Bank of Australia  (RBA) is going to release its official cash rate decision today and  Majority of economists expected a pause in today’s rate decision following the surprise pause last rate decision.

There are some speculation that RBA may resume its rate tightening policy, although the majority still feels that an unchanged verdict is more likely as the economy has not changed much since last rate decision back in Feb. 1, 2010.  However, this may give us a possible pre-buying sentiment as speculators may be looking to buy AUD with hopes for a possible surprise… should RBA leave rates unchanged, we could see an immediate  “buy on rumor and sell on news” reaction as the market sell off AUD immediately minutes after the release.

Australia Retail Sales m/m 03/01/2010

Posted by Henry Liu on under AUD Retail Sales, Australia, Forex News Trade | Be the First to Comment

7:30pm NY Time AU Retail Sales  Forecast 0.8%   Previous -0.7%
ACTION:         BUY 1.4%      SELL 0.2%      AUD/USD

We’ll be looking for a possible again today on the Australian Retail Sales m/m release and we are looking for a minimum deviation of 0.6% from the forecast release of 1.0%. If we get a 1.6% or 0.4%, 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.

However, with the RBA rate decision coming in just 3 hours, we need to make sure that we only enter the market if and when we get our deviation. 

US ISM Manufacturing PMI 03/01/2010

Posted by Henry Liu on under Forex News Trade, US ISM Manufacturing, USA | Be the First to Comment

10:00am NY Time  US ISM Manufacturing PMI     Forecast 57.7  Previous 58.4
ACTION:   BUY 60.0      SELL 55.0      USD/JPY

We’ll be looking for a possibility to trade the ISM Manufacturing PMI today during the New York Trading session, and our tradable deviation for a safe trade is 2.5 points either way.  In the event we get a better than expected release, this could once again fuel the recent bullish rally of USD; however, if the release is negative, below or close to the medium 50 level, we could see some minor consolidation or even a very tightly traded market…  Since this is a leading indicator, investors pay more attention to this release for signs of market direction this month and possibly trend changes…  And with the NFP scheduled on Friday, this release might have more impact than usual should we get a huge surprise.

Canada GDP m/m 03/01/2010

Posted by Henry Liu on under CAD GDP m/m, Canada, Forex News Trade | Be the First to Comment

8:30am NY Time Canada GDP m/m   Forecast 0.4%      Previous 0.4%
ACTION: USD/CAD         BUY 0.1%     SELL 0.7%

We’ll be focusing on a possible trade from the Canadian GDP release (m/m) today, and GDP is defined (by wikipedia) 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.” 

UK Manufacturing PMI 03/01/2010

Posted by Henry Liu on under Forex News Trade, Great Britain, UK Manufacturing PMI | Be the First to Comment

4:30am (NY Time) UK Manufacturing PMI  Forecast 56.3   Previous 56.7
ACTION: GBP/USD        BUY 58.3         SELL 54.3

We’ll be looking forward to trade the Manufacturing PMI number from UK  today and it’s forecasted at 56.3; UK Manufacturing PMI’s medium point is at 50, therefore this forecast is considered as a positive release (above the 50 level means expansion in the manufacturing sector).

We are looking for a tradable deviation (or the difference between the forecast figure and the actual release figure)  of 2.0, and because this is a leading indicator and its impact may affect the future trend of this currency for the remainder of the week or even for the month of March, market should react to this release with volatility should we get out deviation.  We can expect GBP/USD to move 50 pips within the hour if you deviation is hit. 

US Existing Home Sales 02/26/2010

Posted by Henry Liu on February 25, 2010 under Forex News Trade, US Existing Home Sales, USA | Be the First to Comment

10:00am NY Time US Existing Home Sales    Forecast 5.51M     Previous 5.45M
ACTION: USD/JPY          BUY 5.90M            SELL 5.10M

We’ll be focusing on trading the Existing Home Sales today, and since Housing news is one of the more important news event out of the US, this news release will certainly cause some volatilit,y especially if our tradable figures were hit.  Given the fact that this is the last high impact news release of the week, we could expect to see some traders waiting for this release before committing to a trade…

US Prelim GDP q/q 02/26/2010

Posted by Henry Liu on under Forex News Trade, US GDP q/q, USA | Be the First to Comment

8:30am NY Time US Prelim GDP q/q  Forecast 5.6%  Previous 5.7%
ACTION: USD/JPY         BUY 5.9%        SELL 5.3%

We’ll be trading the 4th (Q4 2009) quarterly release of U.S. GDP number.  The first release, or the Advanced GDP release last month, came out surprising upwards at 5.7% and we’ll probably not see much volatility in the market on this second release as more usually during the 2nd release more data have become available thus less possibilities of surprise.  The important fact is to consider the context of the market at the time of the news release, remember market have priced in this release already.

UK Revised GDP q/q 02/26/2010

Posted by Henry Liu on under Forex News Trade, Great Britain, UK GDP q/q | Be the First to Comment

4:30am (NY Time) UK Revised GDP q/q       Forecast 0.2%     Previous 0.1%
ACTION: GBP/USD          BUY 0.5%         SELL -0.1%

We’ll be focusing on the Revised GDP q/q from UK, which is also known as the second quarterly GDP release; GDP 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…

US New Home Sales 02/24/2010

Posted by Henry Liu on February 23, 2010 under Forex News Trade, US New Home Sales, USA | 2 Comments to Read

10:00am NY Time   New Home Sales      Forecast 354K     Previous 342K
ACTION:  USD/JPY          BUY 420K          SELL 280K

We’ll be focusing on the the New Home Sales figure, which is expected at 354K; our tradable deviation is 70K, and if the release is lower, it would strengthen risk aversion sentiment and we should look to SELL USD/JPY or possibly the USD/CHF pair as well; if the number is higher, it would fuel risk appetite sentiment, we may see a rally in USD/JPY or USD/CHF and possibly further downward pressure on the already sketchy EUR/USD pair.

Forex Market Analysis for the week of 02/22/2010

Posted by Henry Liu on under Currency Trading Tips, Forex Market Cycle Trading, Forex Market Sentiment Trading, Forex News Trade | Be the First to Comment

… Taken from my Weekly Outlook Report February 22~26, 2010…  After this analysis we saw perfect SELL entries on both EUR/USD close to 1.3700 and GBP/USD 1.5580 area…  If you had a chance to read this report before the drop, you’d have been on the right side of the market. 

Written on 02/21/2010 just before the risk aversion sentiment on Monday/Tuesday

Last week’s most notable news was probably the surprise rate hike by the Federal Reserve on its discount rate, from 0.50% to 0.75%, which raises the costs of borrowing from banks to other banks.  This is not to be confused with the Federal Funds rate, which still remains at the current level of 0.25%.

US Core CPI m/m 02/19/2010

Posted by Henry Liu on February 18, 2010 under Forex News Trade, US Core CPI m/m, USA | Be the First to Comment

8:30am (NY Time) US Core CPI m/m  Forecast 0.2%  Previous 0.1%
ACTION: USD/JPY        BUY 0.4%      SELL 0.0%

We’ll be focusing on the Core CPI release today and our minimum tradable deviation deviation is 0.2%;  if the release number (core) increases to a minimum 0.4% then we will BUY USD (either SELL EUR/USD or BUY USD/JPY).  If the CPI number stays flat or decreases to 0.0% or less, we’ll SELL USD (BUY EUR/USD or SELL USD/JPY).  Historically even at a difference of 0.1%, market is likely to to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips. 

Canada Retail Sales m/m 02/19/2010

Posted by Henry Liu on under CAD Core Retail Sales, Canada, Forex News Trade | Be the First to Comment

8:30am NY Time Core Retail Sales    Forecast 0.4%    Previous 0.0%
ACTION: USD/CAD        BUY -0.2%         SELL 1.0%

We’ll be looking to trade the Core Retail Sales release and not the headline release today; the core release as a forecast expectation of 0.4% with a previous release at 0.0%.  Core Retail Sales release is a month on month release, and basically it’s a measurement of the activities at the retail level of Canada, excluding most volatile Automobile Sales Components, which makes up about 25% of the Headline or Retail Sales release. A better release generally means more consumer spending, which leads to better economy, thus better for its currency.  And of course the CORE reading provides a far more accurate look of the actual economy as the automotive component could fluctuate per season.

UK Retail Sales m/m 02/19/2010

Posted by Henry Liu on under Forex News Trade, Great Britain, UK Retail Sales | Be the First to Comment

4:30am (NY Time)    Forecast -0.5%   Previous 0.3%
ACTION: GBP/USD         BUY 0.1%       SELL -1.1%

We’ll be focusing on the month on month Retail Sales release today from UK; it’s a direct measurement of consumer activities at the retail levels.  A higher release is generally good for the economy, thus better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.  Retail Sales makes up a substantial part of the GDP or Gross Domestic Product, and the effect of this release could be very profound given the current risk averse condition of the market.

Canada Core CPI m/m 02/18/2010

Posted by Henry Liu on February 17, 2010 under CAD Core CPI m/m, Canada, Forex News Trade | Be the First to Comment

7:00am (NY Time) CA Core CPI m/m   Forecast 0.1%   Previous -0.3%
ACTION: USD/CAD          BUY -0.2%       SELL 0.4%

We will be focusing on the Core CPI release from Canada and our deviation for this release based on historical track record is 0.3%, therefore I’ll be looking for tradable figures of 0.4% or better to SELL USD/CAD or a -0.2% or worse to BUY USD/CAD. 

USD/CAD has been consolidating over recent gains and it is diverging from other major currencies versus the USD.  As most European currencies are trading at their support levels against USD, CAD has been showing exceptional strength, but it is my opinion that USD may gain significantly against CAD if we get anything less than an upward surprise in this release.   If we were to look at correlation historically, we could expect an upward breakout on the USD/CAD pair soon following the collapse of both EUR/USD and GBP/USD recently.

UK MPC Meeting Minutes 02/17/2010

Posted by Henry Liu on February 16, 2010 under Forex News Trade, Great Britain, UK MPC Vote Minutes | Be the First to Comment

4:30am NY Time UK MPC Meeting Minutes          Forecast 0-0-9     Previous 0-0-9
ACTION: GBP/USD           N/A

MPC, Monetary Policy Committee, from Bank of England (BOE) is releasing their meeting minutes over the Rate Decision meeting held about two weeks ago along with the actual vote count over the rate decision and the Asset Purchasing Facility program.  If you recall, MPC decided leave both interested rate and APF unchanged and they are undecided on whether or not the APF (quantitative easing program) should expire or extended for the time being.   But without a concrete answer on the APF program, market took that as a bearish message and sold off GBP.

UK CPI y/y 02/16/2010

Posted by Henry Liu on February 15, 2010 under Forex News Trade, Great Britain, UK CPI y/y | 4 Comments to Read

4:30am NY Time UK CPI y/y       Forecast 3.6%     Previous 2.9%
ACTION: GBP/USD              BUY 3.9%       SELL 3.3%

We’ll be focusing on the CPI release out of UK today using a surprise factor (or deviation) of 0.3%.  If the yearly Inflation number increases to a surprise of 3.9%, which is way over BOE’s inflation target, we will BUY of GBP/USD.  If the Inflation number decreases to 3.3% or less, we’ll look to SELL GBP/USD.  Historically, even with a small difference of 0.1%, market tend to overreac.  If our deviation is hit, there is a probability of over 80% that the market will move 50 pips within the next 30 minutes.