Thursday evening GMT right now. Potential setup for tomorrow:
Short NZDJPY @ 59.80
Stop Loss @ 60.57
Take Profit @ around 59.30
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Wednesday night GMT right now. I am back now and am freezing cold in the UK, having spent the Bank Holiday weekend in a very warm country with my other half. I have updated the Pip Count, Pip Records, Readership stats, and donated August’s charity pips. Check the following pages for more information:
http://www.forexlayman.com/category/charity/
http://www.forexlayman.com/category/pip-records/
http://www.forexlayman.com/category/readership/
Back to business. There are no trade setups for today so for the time being, I am going to be a spectator.
Looks like it has been a very good week for the Australians and hopefully my advice from Friday helped those able to trade at the start of this week. Chinese Manufacturing PMI came out better than expected at 51.7, so that was a clue for a positive surprise out of Australia. The Retail Sales yesterday, and an excellent GDP number of 1.2% today, sent AUDUSD rocketing to as high as 0.9121. The sentiment for AUD is very much bullish at the moment so I will look to buy it on dips. If we get a decent setup I will want to go long until the 0.9200 mark, but not yet. Today saw unusually large gains in AUDUSD so we should see some form of profit taking soon. Basically – wait until we can get in at a decent level before buying.
The US had some mixed messages. US ADP Employment Change number came out today 10K worse than expected at -10K. This is disappointing for the US and indicates more jobs were lost in the private sector last month. ISM Manufacturing PMI came out better at 56.3 which indicates the manufacturing industry is doing better in the US. The moral of the story is to stay out of the market until we receive further clues on the true direction of USD on Friday, when the Non-Farm Payroll comes out. At the moment it seems to be taking a battering from riskier currencies such as and AUD, CAD and NZD. Positive vibes out of Australia seem to have caused some risk appetite in the market and therefore most higher yielding currencies appreciated today against the USD. Such is the nature of FX, we will eventually see some ebb and flow take place, and some of these gains will be given back to the market in the next few days, if not tomorrow.
In a few hours (later today, for folks in the US) we’ve got the AUD Trade Balance. This is not usually a tradeable piece of news so I am going to stay out. It is expected at 3.11B which is actually worse than the previous month – but I am going to put the smart money on a positive surprise here, and some volatility in Aussie and Kiwi pairs at 0230GMT. Since these two currencies moved a lot today, I would actually expect a small sell-off instead, as the market has already priced in the positive news and would have got bored already. Other than that, I expect the storm to settle across the board with low volatility, as traders will wait it out until the NFP number is released on Friday.
Wednesday night GMT right now. 18 pips donated to charity last month, here is the donation slip:
Thursday night GMT right now. EURCAD trade did not trigger so cancelled it.
Firstly, a hello message to the new followers of the blog that have started reading this month. Hope you will benefit from the site as others are doing.
I will be away for the UK Bank Holiday weekend so wont be updating the site until Wednesday next week. This means the fundamental analysis I write on Sundays will not be there this week. I will also update the pip counter, the pip records, and donate my charity pips for August, when I get back.
For those who are able to trade from the beginning of next week, I have taken the time to list out a few things you should be aware of.
It’s the first week of the new month. This means we can expect a whole load of high-impact news releases that are sure to move the market, including the big momma , the US Non-Farm Payroll on Friday. Be very wary when you take positions this week and watch the direction of GBPJPY, this will tell you whether we are seeing risk aversion or risk appetite across the market. If you see strong upward movements in currencies such as AUD, GBP, CAD, NZD – this indicates risk appetite. If you see strong JPY, CHF, USD – this indicates buying in the safe haven currencies, and therefore risk aversion.
I will be looking at the markets from mid-week, but there are some other key news releases before that to watch out for.
AUD Retail Sales on Tuesday 0230 GMT (Monday for folks in the US)
AUD GDP on Wednesday 0230 GMT (Monday for folks in the US)
CAD GDP on Tuesday 1330 GMT
GBP Manufacturing PMI on Wednesday 0930 GMT
Chinese Manufacturing PMI on Tuesday 0230 GMT (Monday for folks in the US)
US ADP Non-Farm Employment Change, ISM Manufacturing PMI on Wednesday 1315 and 1500 GMT
Keep an eye on the Chinese data as it will have an influence on AUD direction early in the week. Also keep an eye on the forecasted figure for Non Farm Payroll, if its significantly better or worse than last month (about 70k deviation more or less) the market will try to price this in from as early as Sunday night. You dont want to be on the opposite side of fundamental sentiment so its important to check this information before the trading week begins.
For the benefit of new readers..
You can check the economic calendar here to stay updated on key events: http://www.forexlayman.com/category/calendar/
For Live news and Market Data: http://www.forexlayman.com/category/market-data/
To see an example of the weekly analysis I usually provide on Sundays: http://www.forexlayman.com/2010/08/22/fundamentals-for-next-week-220810/
To see what my Charity pips are all about, see this page for an explanation: http://www.forexlayman.com/category/charity/
Im also pleased to say that since July the number of countries viewing the blog has passed the 60 mark. I will update the readership section when I get back. This is seriously cool so thanks to everyone around the world for the support.
Until then, take it easy and good luck with your trading. Any questions please post them, or if you are on Facebook, ask in the “Forex 101″ discussion on my Facebook page (click the Facebook icon to your right to access it) and I will be sure to respond.
