This week was driven by risk appetite sentiment as traders took advantage of the improved economic data including the exceptional US January employment report, China’s January manufacturing PMI reading, better European PMI reports, and strong Empire and Dallas Fed manufacturing surveys… Not mentioning Tuesday’s informal EU leaders’ summit, where 25 EU member states (ex the UK and the Czech Republic) further refined their commitment to the new fiscal pact and the €500B ESM permanent bailout fund, which in turn boosted the risk sentiment further.
Forex News Trade
We´ll be trading the US NFP (Nonfarm Payroll) Employment Change, it is the focus news release for the week. Here´s the forecast:
8:30am (NY Time) US NF Employment Forecast 150K Previous 120K
8:30am (NY Time) US Unemployment Rate Forecast 8.5% Previous 8.5%
ACTION: 220K SELL EURUSD / 80K BUY EURUSD
We´ll be getting the Canadian Employment Change release number tomorrow, here is the forecast:
7:00am (NY Time) CAD Employment Change Forecast 24K Previous 17.5k
Unemployment Rate 7.5%
ACTION: EURCAD SELL 50K / BUY USDCAD -5K
We´ll be trading the UK Services Purchasing Manager Index today at 4:30am (NY Time). This is a leading indicator similar to the Manufacturing PMI that was released early this week, here´s the forecast:
4:28am (NY Time) UK Services PMI Forecast 53.5 Previous 54.0
ACTION: GBP/USD BUY 56.5 SELL 51.0
ISM or Institute for Supply Management is releasing its PMI (Purchasing Manager Index) today. As a leading indicator, traders generally pay attention to this report for hints of economic trend.
Here´s the forecast:
10:00am NY Time US ISM Manufacturing PMI Forecast 54.5 Previous 53.9
ACTION: 57.0 SELL EURUSD/ 52.0 BUY EURUSD
Trade Plan
We´ll be looking for around 2.5 points of deviation for this trade. If a 57.0 or better number is released, we could see some USD strength, thererefore SELL EURUSD. If the opposite is true, or 52.0 figure is released, expect to see weaker USD in the short term, therefore we should BUY EURUSD.
ADP or Automatic Data Processing (NASDAQ:ADP) is releasing it´s own estimate for the private sectors of NFP (Nonfarm Payroll). This is a high impact release and it´s followed by currency traders as they look for hints on Friday´s NFP official release. Here´s the forecast:
8:15am NY Time US ADP NFP Change Forecast 190K Previous 325K
ACTION: 240K SELL EURUSD/ 140K BUY EURUSD
Manufacturing PMI is a leading indicator that is usually released early in the month. Traders pay attention to this release for surprises as this survey may help to shape the general trend of the currency for the rest of the month. Here is the forecast:
4:30am (NY Time) UK Manufacturing PMI Forecast 50.0 Previous 49.6
ACTION: GBP/USD BUY 52.0 SELL 48.0
