Forex Trading Signal 07/16/07

Usually we do not have any trades on Sundays; however, tomorrow is an exception. We have New Zealand CPI coming out. Our Sunday evening is actually Monday in New Zealand.

1. Sunday, July 15th, 2007 (6:45 p.m. New York Time) NEW ZEALANDSo at 6:45 p.m. New York time we will have a New Zealand CPI coming out. It is a very crucial indicator with very important timing. It is expected it will come out at 0.8% versus 0.5% previous quarter. If it comes out at 1% or higher, I think NZD/USD may possibly gain 40 pips or more in the first hour of the report. A much higher than expected CPI reading would signify an increased chance that Bank of New Zealand will raise the interest rates within a week after this. Right now there is about 20% chance of that happening, but if the CPI comes up very high, I think the chance would increase. On the other hand, if the CPI comes out same as previous quarter at 0.5% or lower, that would be pretty bad for the New Zealand dollar, and NZD/USD can possibly go down by 40 pips or more in the first hour of the report. The market is priced in right now that inflation would be higher than previous quarter, and if it comes out exactly the same or lower, I think it would be pretty devastating for the New Zealand dollar short-term.

SUMMARY:* Report: New Zealand CPI* BUY on NZD/USD if the number will be 1% or higher* SELL on NZD/USD if the number will be 0.5% or lower* If the trigger is hit, expect 40 pips or more in the first hour of the report.

Then on Monday we also have only one report to watch and possibly trade. First of all, we will have German CPI coming up in the morning. I suggest you to skip that one as I will not be trading that either. That report usually does not move anything.

2. Monday, July 16th, 2007 (8:30 a.m. New York Time) CANADANext, at 8:30 New York time, on Monday, we will have two reports coming out. We will have manufacturing shipments coming out of Canada, and we will have Empire State business conditions coming out of the USA. Some economists consider Empire State index as a hot indicator but don't be fooled - it is not. It is a very dirty indicator that you might as well skip. The important one will be the Canadian manufacturing shipments. The U.S. empire state business index could be important during specific times of the economy but right now not tom many cares of the manufacturing activity in the United States. But the Canadian manufacturing shipments is important one because right now the Canadian dollar has gained a lot against all currencies. There is a lot of speculations whether or not it is going to affect the export. We saw trade balance coming up very positive for the Canadian dollar last week and this time the manufacturing shipments would be scrutinized. It is expected that manufacturing shipments out of Canada would come out of 0.4% but the consensus is actually very mixed. Some people think it is a negative number, other people think that it is a positive number so the market really doesn't know what it wants. Previously, it came out at -0.6%, and it should increase from the previous month 0.4%. If the number comes out at 1.4% or higher, I think it would be positive reading, and we may possibly sell EUR/CAD (towards Canadian strength), and that could be good for about 40 pips or more in the first hour of the report. On the other hand, if the number comes out at -0.6% or lower, that would signify same reading as previous month, or even more negative, and that would be bad for the Canadian dollar and EUR/CAD may possibly go up by 40 pips or more in the first hour of the report. I really think on the lower side we may see EUR/CAD going up by 60 pips or more in the first hour of the report.

SUMMARY:* Report: Canadian Manufacturing Shipments* SELL on EUR/CAD if the number will be 1.4% or higher* BUY on EUR/CAD if the number will be -0.6% or more negative* If the trigger is hit, expect 40 pips or more in the first hour of the report.

Then later on we have Japan territory industry activity index coming out. I think it is another waste of time indicator. From my experience I can say that you never know what it may do. Sometimes the market cares about it, sometimes does not. I suggest you to skip that one too.

That's all for tomorrow. I hope you are having a great weekend, and please wait for my next email where I will review what will have happened tomorrow. Thank you!

Thanks to Secretforexsociety.com