by Henry Liu on March 28, 2010
Currency Market Analysis – Sunday March 28, 2010
Looking at the market on early open Sunday and browsing through the headlines over the EU Summit last week, I’ve got the distinct impression that risk aversion sentiment brought on by the Greece debt crisis prior to the Summit is now over. The perception of a possible “need” for an IMF bailout is at least, temporarily, out of mind and out of sight, and as currency trading is concerned, we have reasons now to expect a risk appetite driven market this week, as long as we don’t get any unscheduled negative news releases…
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by Henry Liu on March 24, 2010
4:30am (NY Time) Forecast 0.8% Previous -1.8%
ACTION: GBP/USD BUY 1.4% SELL 0.2%
We’ll be trading 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, and 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 decent part of the GDP and the effect of this release could be very profound to the immediate trend given the current risk averse condition of the market.
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by Henry Liu on March 23, 2010
10:00am NY Time New Home Sales Forecast 318K Previous 309K
ACTION: USD/JPY BUY 390K SELL 250K
We’ll be looking for a possible trade from the New Home Sales figure, which is expected at 318K; 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 uncertain EUR/USD pair.
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by Henry Liu on March 23, 2010
8:30am NY Time UK Annual Budget Release
ACTION: N/A
We’ll be getting the Annual Budget Release from UK today, and this release covers UK government’s budget for the year, including figures such as spending, income, borrowing levels, financial objectives, and investment plans. Because of the potential surprise from this release, we could see Sterling react with extreme volatility. Budget release also affects future monetary policy direction, therefore it is going to be a widely watched event.
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by Henry Liu on March 22, 2010
10:00am NY Time US Existing Home Sales Forecast 5.01M Previous 5.05M
ACTION: USD/JPY BUY 5.40M SELL 4.60M
We’ll be looking forward to trade the U.S. 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 volatility in the market, especially if our tradable figures were hit.
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by Henry Liu on March 22, 2010
5:30am NY Time UK CPI y/y Forecast 3.1% Previous 3.5%
ACTION: GBP/USD BUY 3.4% SELL 2.8%
We’ll be looking for a possible trade from the CPI year on year release out of UK today using a surprise factor (or deviation) of 0.3%. If the Inflation number increases to a surprise of 3.4%, which is way over BOE’s inflation target, we will BUY of GBP/USD. If the Inflation number decreases to 2.8% or less, we’ll look to SELL GBP/USD. Historically, even with a small difference of 0.1%, market tend to overreact. If our deviation is hit, there is a probability of over 80% that the market will move 50 pips within the next 30 minutes.
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by Henry Liu on March 21, 2010
UPDATE: Mastermind Mentoring Program registration is over. I’d like to thank everyone for your support and patience during the past 2 weeks. Now I am going to go back and concentrate on trading exclusively. I with you all a great trading week.
Here is the first part of my weekly outlook which I think will help you in your trading decision this week, as the market may be in risk aversion mode….
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