Christmas and SecretFXNews

Excuse the reduce amount of News Trading Reviews, recently I was asked to start writing Daily Prenews signals and analysis for SecretFXTrading.com

If you go there you can sign up for a daily email with the pre-news alerts, which include deviations to look out for and review of price action on previous releases and general overview of the release.

Also I am going on holiday for Christmas, this includes quite a long flight and is a few weeks long, so will get back into forex full steam in mid january.

Forex News Trade Plan for US Housing Starts And Philly Fed

News Trading Preview Tuesday 12-15-2010 (UK CCC, US CPI)

Click link for Forex News Trading Signals

News Trading Preview Tuesday 12-14-2010

Sorry I didn't post the link earlier, as it includes the strategy for UK CPI and German ZEW...anyway at the bottom is the strategy for US Retail Sales

Forex News Trading Strategy for US Retail Sales

njoy

Forex Trade Strategy for New Zealand Retail Sales

Please visit Secret FX Trading's Forex News Trading Signal for New Zealand Retail Sales News Release at 16:45 EST Dec.13th

Economic Events for Forex News Trading for week of Dec.13th-17th

* all times are Eastern Standard Time (GMT-5)

     13-Dec
          16:45 NZD Retail Sales

     14-Dec
          04:30 UK CPI
          05:00 GER ZEW Economic Sentiment
          08:00 NOR Interest Rate Statement
          08:30 US Retail Sales
          09:15 US Industrial Production
          14:15 US Interest Rate Statement

     15-Dec
          04:30 UK Claimant Count Change
          08:30 US CPI

     16-Dec
          04:30 UK Retail Sales
          08:30 UK Housing Starts
          10:00 UK Philadelphia Fed Index

     17-Dec
          04:00 GER IFO

Long GBPUSD Trade during the European Session - helped by UK Construction PMI

This Thursday morning Dec. 2nd 2010, during the European trading session about 45 minutes after the London Open there was a live online forex trade signal given in the Profitmongers traderoom. It was tempting to jump in long just before the London open as good momentum had been building for the past 3-4 hours as the Asian trading session came to an end, however this was very dangerous as often when London opens for business there is some sort of reversal as dealers and marketmakers try to fill the orders on their books. Also traders in asia will book their gains and close up shop for the day. The British Pound-US Dollar pair, otherwise known as cable did drop some 45 pips just below the 1.5600 handle. The live trade signal was given to enter the market, buying the GBPUSD pair around 1.5590.

Although the chart looks like it moved instantly, this is a 5 minute chart and some patience was required to allow the price to move up in our favour. Time has a tendancy to seem longer when you are a taking risk, such as when a trader has a highly leveraged position on a forex currency pair in the market. Every effort must be made to remain calm and patient and somewhat detached and unemotional, just stick to your rules and let the trade do what it will, yet at the same time remain attentive to price action and the news, ready to react to any situation which might occur which would require the trader to take action.

Profit was taken when the GBPUSD FX Currency pair reached back over the 1.5600 handle and took out the last swing high at 1.5615, although this was a minor swing, likely there were some stops their from those traders who shorted the pair right at the 8am GMT open, as the 2 doji candle right before this time seemed to provide a good entry. Risk appetite had reemerged after a few weeks of sell-offs so it seemed that there was good potential for more upside. With the stop-loss moved to break-even the trade was risk free and the after a pullback of 10 pips of so the UK Construction PMI numbers came out. Last month this number provided a good move although there were other market forces exerting force at the time, perhaps M&A activity or inter-european government payments. Regardless a small positive deviation again helped the GBP take out the important 1.5650 level which provided resistance yesterday and seems to be a natural level for stops to be clustered. Here is the Construction PMI data:

(UK) NOV PMI CONSTRUCTION: 51.8 V 51.3E- No revisions

The expectations for this number had been lowered quite a bit after last months poor number. In fact the expectation was lower than last months number by -0.2. So although this number was +0.5 above expectations, it was only +0.3 above last months poor number. So it did not seem so great, although with risk appetite in the market, especially since yesterday's 13 year high for Manufacturing PMI, just the fact that the number was not so low as last month was enough to get the GBPUSD to rally another +55 pips. The possibility of price getting close to 1.5700 was high but the way price knocked out 1.5650 with a strong spiky up-bar, it seemed more sensible to book the +75 pips rather than wait for another +20 or +30 more. The last pips are always the most expensive. This proved to be a wise choice as the focus of the market moved to the ECB's Claude Trichet speech after their Interest Rate Announcement the market sold off quite handily. It appeared that Trichet was not giving the verbal messages that the market was expecting, however as he spoke it was reported that the ECB was seen in the market buying peripheral debt. This is the Greek, Irish, Portuguese, Spanish and Italian Bonds whose yeild have gone way up. When the ECB buys these bonds the yield go down and this helps the EURUSD pair go up. The GBPUSD followed in along with this move.

DOE Crude Inventories - Modest Deviation causes some volatility

Another release of the DOE Petroleum Inventory this Wednesday Dec. 1st 2010 at 3:30pm GMT (10:30am EST). Last night's API Inventories did not have much of a deviation and the Crude Future did not move much. Here were the figures last night and set the context for the more important DOE figures this Wednesday afternoon:

API PETROLEUM INVENTORIES: CRUDE: -1.14M V -1ME; GASOLINE: +1.07M V 0KE; DISTILLATE: +225K V -1ME; UTILIZATION: 81.9% V 85.8%E - Cushing crude inventory: +600KK to 33.9M barrels

Here are the figures for the DOE Inventory figures, which did have a bit more of a deviation, at least for Crude which is the main number to base at trade in the most liquid energy market, the Crude Oil Future Contract:

DOE CRUDE: +1.06M V -1ME; GASOLINE: +560K V 0ME (FLAT); DISTILLATE: -195K V -1ME; UTILIZATION: 82.6% V 85.8%E- Distillate demand -135K bpd to 3.67M bpd - Gasoline demand +40K bpd at 8.87M bpd

So Crude Oil came out with a build of about 2,216k which is significant but usually a bit below what would normally trigger a news spike trade entry. The deviations on Distillates were only +906k and Gasoline only +261k, which were small but did deviate in the same direction as the Build in Crude. A Build is bad for prices and the Crude Oil Future did drop, however in an environment of rising risk appetite after good Manufacturing PMI and ADP Employment figures, especially after the sell-off which has occurred the past few weeks, Crude could not maintain this sell-off. There were some opportunities to scalp the volatility. An entry at the 78% fibonacci pullback of the initial news spike caused a move back to thee 38% of the same move for about 20 ticks. Also when price took out the swing high which was the pre-release price, there was another opportunity to scalp it back to the 50%, however when pre-release price is hit it is considered evidence that the news is not enough to move the broader news sentiment flow of the market and trader should start to look at getting on the other side of the market

UK Manufacturing PMI - Something for Everyone

This Wednesday morning at 9:28am GMT (4:28am EST) the Manufacturing PMI figures for the UK were released.  This economic figure is based on a survey of the purchasing managers in the manfacturing industry and it is seen as a good leading indicator of the economy as if these companies are purchasing more inventory then the assumption is that they will be creating more goods as they are expecting consumers to send more.  This data followed a manufacturing pmi data from a many other nations including German, Italy, Spain & Sweden which were lower than expected and France,Ireland, Norway, Hungary, Czech & Turkey which was higher.  The big news which was aiding Risk Appetite and causing the markets to reverse some of the steep losses seen at the beginning of the week was the Chinese Manfacturing PMI which was released last night-30 minutes after the Australian GDP figures.  This was a 7 month high for the Chinese data and indices rallied thru the asian session and even the EURUSD lifted....news as the European session got started was that the European Peripheral Bond spreads were tightening, providing some relief to the crisis for now.  Any here is the UK Data:

(UK) NOV PMI MANUFACTURING: 58.0 V 54.7E (highest level since Sept 1994)
- Employment Index: 57.6 v 55.4 prior (record)
- Prior revised higher from 54.9 to 55.4

This is a stellar deviation and the best of all the countries Manufacturing PMI figures.  In fact as the data shows it was the highest reading since 1994.  So automatically the Super Sonic Fast Economic News Weapon triggered a trade entry into the GBPUSD.  Pre-release price was about 1.5585 and priced shot up quickly to 1.5612 for instant +25 pips or so.  This deviation was massive and looking at the history of price action on the British Pound after the release of this number it was quite obvious there would be more gains to come.   About 20 seconds after the data hit the wires as the swing traders and technically oriented participants scrambled to eject out of their positions, the GBPUSD briefly dipped down briefly to 1.5603 on the ask.  This was a fantastic opportunity to enter a forex news afterspike trade, and we did live in the online forex signal traderoom.  Price continued to move up and hit 1.5620 soon later.  Price action did get a bit choppy with 10 pips up then 10 down, but there definately upward pressure on the pair.  Going back to the price action history of the last big deviation which was in September with a -2.7 deviation - after the initial spike down, price grinded down over the next 15 minutes with little retracement, but much slower than you might expect after such a deviation.  Therefore it seemed very likely this would continue, some patience was needed.  Price soon hit 1.5630 which is the 161% fibonacci projection of the initial news spike move

The highs for the week on the GBPUSD were just around 1.5650 and it was highly likely that stops were lurking there for those who had positioned themselves short for the week, see the hourly chart.  Those trading off daily and weekly charts and not keeping up to date with news sentiment flow thru the progression thru the trading venues on the world's main Asian, European and American continents. As previously mentioned, the market wants to do business and will go for those stops, but it did take awhile thou as the 2nd chart shows - some 45 minutes after the release the 38% fibonacci of the move up provided the launching platform to take out those 1.5650 stops.  Price kissed this level and did not look back.  A nice obvious target there for more of a post news sentiment flow swing trade.  For the more aggressive a short once the stops had been taken would have worked too.  Once price moved back off this level some, partial profit could be taken and the stop moved to breakeven. Eventually the British Pound did fall back 60 pips off this level if the trader was patient enough to let it make its move, usually this types of trades are great scalps but occasionally they can run and make a decent amount of pips.

Norwegian PMI - One for the Books

This Wednesday Dec 1st 2010 at 8am EST (3am EST) the Norwegian PMI figures were release.  PMI figures from several nations were released.  This entry is just to note the move that occurred from this Norwegian figures for future reference.  Here is the data:


NORWAY NOV PMI: 56.0 V 54.0E
- Prior revised higher from 54.2 to 54.4

Australian GDP - blips down quickly

Late Tuesday Night at 12:30am GMT (19:30pm EST) the GDP figures for Australia came out. Here is the data:

AUSTRALIA Q3 GDP
Q/Q: 0.2% V 0.4%E
(lowest since contraction in Q4 of 2008);
Y/Y: 2.7% V 3.4%E
- Q2 q/q revised lower to 1.1% from 1.2%
- Q2 y/y revised lower to 3.1% from 3.3%
GDP Contributions q/q
- Final Consumption 0.6% v 1.6% prior
- Capital Formation 0.9% v 0.6% prior
- Terms of Trade 0.8% v 12.5% prior
- Disposable Income: -0.4% v 5.1% prior

Price blipped down very fast and did a quick pullback nearly to the 38% retrace of this initial news spike but was front-run by a couple of pips. Really would have been safer to get a bit more of a pullback after this initial new reaction move, perhaps somewhere about the 50%. Regardless those willing to jump in quickly ahead of the 38% level were able to pick up a quick +15 pips. Later some half an hour later, price did finally pullback to the 50% level and this did create an opportunity for a +25 pip move, but at this time the Chinese Manufacturing numbers came out very good, so to short the Australian Dollar, which is closely tied to the Chinese Economy would have been risky as well the news was already half an hour in the past. Eventually the AUDUSD did turn around and head much higher as the effect of the hot Chinese data fed traders confidence to take on more risk