News Corner: Currency Trade Tips
Posted by cvbasheer on January 27, 2010
· Today at 3:00 pm we have the UK Confederation of Business Industry (CBI) Realized Sales expected to come out at 11 vs. 13. The survey is carried out to 160 retail & wholesale companies to get a relative rate of current sales volume. CBI Realized Sales is a leading indicator of consumer spending because retailers and wholesalers are directly influenced consumers buying levels. This data is less effective but a higher deviation might move the market for short term profits. If the data comes out at 8 or less then sell GBPUSD for 25 pips. If the data comes out at 16 or more then buy GBPUSD for 25 pips.
· At 7:00 pm we have the US New Home sales expected to come out at 372k vs. 355k. The number of new single family homes being sold during the previous month. This is one of the leading indicators of economic health. If the data comes out at 400k or more then buy USDJPY for 25 pips. If the data comes out at 340k or less then sell USDJPY for 25 pips.
Important Data: Market Insight
· At 11:15 pm we have the US Federal Funds Rate expected to come out at 0.25% vs. 0.25% What it is?
The US Federal Bank would decide the interest rates in which the banks lend the balances held at the Federal Reserve to other banks overnight. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.
Federal Reserves Policy makers are considering adopting a new benchmark rate to replace the one they used for 2 decades. Since the Lehman Brothers collapse, the central bank was unable to control the interest rate since September 2008 as the US Federal Bank had injected 1 trillion $ to prevent the economy from collapsing. The central bank needs to have an effective interest rate policy to raise the interest rates from low in order to check & control the inflation.
The Federal Open Market Committee is likely to maintain its pledge to keep interest rates exceptionally low for an extended period in a statement during the interest rate decision. The Fed probably wont raise interest rates from record lows until the November meeting, according to the median of 51 forecasts in a Bloomberg survey of economists this month. We except the rates to be the same but the Federal Open Market Committee would decide a new strategy other than the Quantitative Easing Program, if there is some other strategy it would move the market. Please be careful trading this data as the market would be very volatile during this data. Market Call:
· Yesterday the Euro plunged during the Asian Session but there were no major movements during the Euro and US sessions which had a consolidated range and closed to 1.4070. Intraday support for EURUSD is 1.4025 and intraday resistance for EURUSD is 1.4130. The trend of EURUSD is still looks bearish until the resistance of .14130 -1.4140 is not broken. GBPUSD
· The Sterling fell against the dollar due to less expected data of GDP which marked that the UK can come out of recession later than the other countries. GBPUSD bounced from an intraday resistance of 1.6262 and fell to a low of 1.6093. The intraday support for GBPUSD is 1.6090-1.6085 and intraday resistance for GBPUSD is 1.6200 & 1.6262. USDJPY
· The Japanese yen is getting weaker against the dollar as the USDJPY dips to a low of 89.13 during the Asian Session today. The USDJPY fell from 90.55 acting as a good resistance, we would recommend selling around these levels after the Japanese Yen retraces. GOLD
· There is a good resistance seen in the gold at 1103-1104$ an ounce. The gold retraced against the dollar from a low of 1085 and touched a high of 1102$ with the resistance levels created on 25th & 26th Jan. We would recommend selling when it bounces the resistance levels and intraday support of 1085$.