Trade Ideas

ISM Non-Manufacturing numbers came out with less than stellar number of 57.1 versus 58.9 in November. That number definitely shows growth in the month of December, but at a slower pace. The market’s reaction to the number was very “unspectacular”, so I have decided

It looks like dollar bullishness just continued at full steam as the greenback continued its rally and stopped out our trade. GBP/USD dropped almost all the way to 1.9400 before we finally saw a retracement of 50 pips. Also, we got no help as GBP PMI came out slightly better at 60.6. So, I was a little bit off in my timing in that I was looking for a retracement then dollar rally, but instead we got further dollar rally, then retracement…doh!

We saw a rebound today in ISM Manufacturing Index when it came in at a surprising 51.4 versus the consensus of 50.0, showing slight growth in December from November. Also, the ISM manufacturing prices paid came in at 47.5 versus the consensus of 54.0 – this reflects slower demand and a let-up in raw material pressures.

The second half of our trade stopped out at breakeven, so we gained +29 pips on the first half from our Euro session trade. We have ISM manufacturing coming out in the next ten minutes, and with the dollar rebounding during the Euro trading session on speculation of a stronger ISM number, I’m looking to go long to stay with the breakout and current short term dollar bullishness. I will wait for the ISM numbers to released and see if there are any viable short term setups.

With such strong positive US data today, I have decided to close the trade since the reports came out against my short dollar bias and the pair will probably continue to linger around 1.9600 price area for the rest of the day. The current market rate is approximately 1.9595 -You may close yours out at your descretion. This will be the last trade of the week as there are no significant reports lined up tomorrow….

Too bad we couldn’t finish the year out strong, but I am very hopefull for 2007….

Tomorrow morning we have a slew of economic reports coming out of the US – most notably the , , and the Chicago PMI (Big Pippin did a great job with a in his post today of all three reports). Basically, the forecasts are calling for strong numbers and we may see a continued end of year rally in the greenback.

We saw disappointing data from Canada this morning as retail sales came out at -0.7% versus the forecast number of -0.4% and GDP came in at 0.0% versus the forecast of 0.1%. So, we saw USD/CAD jump up 30 pips shortly after the report, stopping out the second half of our trade at 1.1515. So, for those of you who didn’t get to move your stop to breakeven after pt1 was hit – like me – we made +20 pips on the first half and -35 pips on the second for a total of -15 pips.

Well, it looks like this pair has continued to rise and avoided our short entry orders. Technically, the pair has risen outside of the channel and into the 61% Fib extension line at 92.70. Stochastics and RSI are still screaming overbought on the daily chart, but I added the MACD which is telling me we have a little more to go. Fundamentally, the Aussie dollar has been supported by strong fundamentals and a recent rise in commodities, especially oil and gold. The Bank of Japan has skipped the rate hike and left us with “moderate” growth rhetoric. So, I see this pair traveling another 100 pips at least before we see a reversal.

No pick for tonight. With the lack of any major news reports and as traders get ready for the holiday season, I don’t see any potential trading opportunites within the next few hours. We do have the Bank of England Meeting Minutes at 4:30 am EST, in which the market has predicted that it was a 9 – 0 vote to keep interest rates unchanged. This event does have market moving potential, as it may hint at future interest rate moves, but we will wait until after the report to see the markets reaction and if there are any potential trade opportunities. Until then stay tuned!

As expected, USD/CHF continued to drift lower and is now currently trading approximately at 1.2115. For those of you who stayed in the trade – good job! But, as we approach the Euro trading session, you may want to limit your risk by adjusting your stop loss, closing part of your position, or closing your trade all together.

Tonight’s Pick will be a continuation of yesterday’s short trade idea of USD/JPY after the US Current Account number was released. Again, we took off a small profit of 10 to 15 pips in the first half of our trade, move our stops to break even, and adjusted our pt1 to 117.70. We’ll see what happens after the BoJ interest rate decision and comments from BoJ Governor Fukui soon afterwards. So, we’ll keep our exit strategy the same and see what happens.

Update – 9:30 am EST

US CPI data has come and gone and we saw the dollar drop on flat CPI numbers. Unfortunately, it’s a little too late to jump in long at 1.2125 as i posted on my trade update. For those of you who did decide to buy at 1.2125, please set your target for 1.2180 which is coming up pretty quick at the current market price

I don’t currently have a trade idea for Currency Cross-Eyed at the moment, but here is a great looking chart for all of you range players out there. Check out the chart and you can see AUD/JPY at the top of the channel drawn on the daily. Usually, I only go long on pairs that have a positive carry, but with the pair at top of the channel and Stochastics in overbought territory, we may have a great short opportunity on our hands.

I was expecting a higher number than expected, but today’s headline US Retail sales number for November came out at a whopping 1.0% higher, and the core number came out at 1.1% (For a more indepth analysis of today’s reports check out ). Pretty crazy!!!

Today’s trade will focus on US retail sales at 8:30 am EST, but before that we will take a look on how yesterday’s reports may affect today’s trade.

First, we saw a surprise as the US Trade Balance number was reported at -58.87 bln versus the consensus of -63.0 bln. We haven’t seen a figure that low since August 2005, and it is consistent with the uptrend in the past few reports.

We have so many different themes in the market – from the US economy, US pressure on China’s currency, rising commodity prices, etc – that many possible trade opportunities exist out there. But we do have the FOMC rate decision tomorrow at 2:15 pm EST, and we should see a muted trading environment as the market waits for the Fed’s outlook on inflation, the economy and future interest rate moves.

Today was a wild ride wasn’t it?? It was like those old FX days of crazy volatility that we haven’t seen much of lately. NFP came out pretty much in line with consensus, but there was a downward revision of Oct number to 79K from 92K. So, we saw some volatility after the NFP reports, but the mother of all moves came after US Treasury Secretary Paulson commented on how a “strong dollar” is in the best interest of the US, and how today’s reports was good news for the US economy.

Update: 10:37 am EST

Our short trade was triggered at 1.3350 and we hit pt1 for +40 pips….Holla! I closed out my position because this retracement may not move much further, but for those of you still in the trade I would adjust your stops to breakeven or close your position at your discretion.

We’ve had a good run with this position, but it has been stagnant for the past few days and we have potential market market volatility with the NFP report coming ahead. It’s time to take profits and look towards the next trade opportunity. At the current market price of 1.5895, we will close remaining lots for a 30 pip profit.

We have the monster of all reports tomorrow in the US Non-Farm Payrolls! For this report, I usually wait until the number is released and guage the market reaction looking to fade the move, so that’s what we will do tomorrow.