Trading plan for Monday
NEWS: CHF 3:15 AM est Retail Sales
CAD 8:15-8:30 AM est Housing Starts / Building permits
10:30 AM est BOC Business Outlook Survey
AUD 7:30 PM est Home Loans
EUR/USD rallied through resistance on Friday, over the 20 day MA where price closed above the previous
weekly highs where price is currently testing on late Sunday evening. IF price continues with the bullish price
action, the next possible resistance is 1.4530 and 1.4551 as the fib targets from the most recent high low swing.
IF price sells off from the current highs of Sunday, watch for possible support at the CURRENT fib retracement
levels at 1.4407, 1.4380 and 1.4352. IF a newer daily high in price is made, then redraw the fibs from the high
of Sunday to the low from last Friday and use these levels.
GBP/USD rallied up on Friday to the week’s 62% retracement for the high of the day then rallied again late
Sunday to double top at this level where price currently resides. IF price rallies to retest this level, 1.6109 is
the high of Friday and may again be resistance, as well as, 1.6192 which is the next fib target. IF price sells off,
1.6003 and 1.5977 are the fib retracements from last week’s low to Sunday’s high for potential support.
USD/JPY reversed from last week’s early rally and sold off on Friday after finding resistance at the 200 day
MA. Price is still strong, but may need to retrace if the uptrend is to continue. IF price does sell off, 92.22 is
a weekly pivot and 62% retracement and 91.64 is a fib target for possible support. IF price rallies, 93.00 and
93.18 are the CURRENT 50/62% retracements from last week’s high to Friday’s low for possible resistance.
USD/CAD continued to sell off and is still testing the lows of Sunday for support as price continues to sell off.
Price is testing a fib target for support. IF price breaks this level, the next possible support is 1.0218 and 1.0191
which are fib targets from various swings. IF price rallies from the current low of Sunday, 1.0337 is the 62%
retracement from Friday’s high and 1.0369 is approx. the highs of Friday for possible resistance.
Interpreting the GDP report: How to make sense of the numbers.
Interpreting the GDP report: How to make sense of the numbers.
If you trade forex, you already know that the GDP report is one of the most appreciated pieces of information in the marketplace. It is comprehensive, provides a picture of national economic activity on a meaningful time frame, and has important implications for such variables as the unemployment rate, central bank rates, and inflation. We do not pretend that the small space of this page will allow us the chance to make a detailed exposition on the subject, but we do aim to present a few salient points of the report as they relate to trading decisions, and market trends.
The GDP report provides a snapshot of all economic activity that take place inside the borders of a nation. Any economic activity that in some way leads to the production of goods or services is included in the report. If a foreign firm employs workers in the U.S., for example, the products created by U.S. workers will be accounted for in the report. On the other hand, if an American firm operates one hundred factories outside in Mexico, and generates billions of dollars in income from its activities there, none of it will be made a part of the GDP report, since no production takes place inside the national borders.
The GDP report is not generally regarded as a forward-looking indicator, and indeed, few of the information contained in it has a great degree of relevance for the future dynamism of the economy. On the other hand, no one has a crystal ball that can show the future, so central bank authorities include the information presented by this report in their evaluation of inflationary pressures. In particular the GDP deflator is an important piece of data that tells us how much price pressure is generated by domestic production. It differs from the CPI in that it does not account for import prices. By looking at this indicator, economists can isolate the domestic portion of the inflation spectrum, which can then help them decide the impact of currency fluctuations on price rises at home.
The GDP report accounts for all production in a country, but it only calculates the values of final goods. In other words, the report does not calculate the number and dollar value of tires, car motors, but only measures the dollar value of automobiles created by domestic industries. As a result, it provides a compact, yet detailed overview of national economic activity.
The GDP report is one of many economic indicators, and it must be taken in the context of other indicators that contribute to the big picture as it exists in reality and in the minds of traders. By familiarizing yourself with the GDP number and its details you may gain a significant edge over traders who are ignorant of its meaning and significance. This particular indicator is relatively straightforward, and if you are a trader, there is no justification for not studying and comprehending it to the maximum extent possible.
Review on today’s trading day
NEWS: GBP 4:30 AM est MPC Meeting Minutes
USD 10:30 AM est Crude Oil Inventories
2:15 AM est ** FOMC Statement **
EUR/USD rallied up strongly through resistance and made fresh yearly highs after price sold off slightly
for several days in row beginning late last week. The high of the day is currently at the weekly pivot
where price is currently residing and testing again for resistance. Because of the lack of selling at this
level, price may merely be stalling and consolidating before attempting to rally again at some point
during the rest of the week. IF price does rally and pops over the weekly pivot, the next possible
resistance are the fib targets from the weekly high/low at 1.4903 and 1.4953. If price does eventually
sell off from the weekly pivot, the next potential support is the current 62% weekly fib at 1.4693 and
the next long term 38% retracement at 1.4580.
GBP/USD also continued to rally from Monday’s rally and double bottom from the beginning of the
month and found the high of the day at the 20 day MA. The trend bias is still bearish and the next
potential resistance are the next long term 50/62% retracements at 1.6437 and 1.6508. If price sells
off from the 20 day MA and current weekly high, the current weekly 38/50/62% retracements are
1.6293, 1.6363-1.6232 for possible support as price sells off.
USD/JPY continued to sell off after finding resistance at the 20 day MA on Monday and sold off to
the next 62% retracement and monthly and weekly pivots where price is currently testing for support.
If the sell off continues, 90.58 and 90.25 are fib profit targets for possible support. IF price reverses
from the weekly pivot and rallies, 91.72 and 91.91 are the current weekly 50/62% retracement levels
that may offer resistance.
USD/CAD sold off also from the 20 day MA and sold off early in the trading session on Tuesday as
price approaches the previously strong support level where price found support multiple times. IF
price continues to sell off to retest the level, watch for possible support at the 1.0600-1.0587 zone
and the next strong possible support at the fib target cluster at 1.0550. IF price rallies, from Tuesday’s
current low and rallies, 1.0756 and 1.0779 are the current 50/62% retracements for possible resistance
if price rallies.
Review on 7th of September
NEWS: USD (Bank Holiday) Labor day
CAD (Bank Holiday)
EUR/USD sold off to last week’s lows, found support and rallied to a long term trend line that
has contained price multiple times in the last 10 days and sold off. Price is still above 20 and 50
day MA’s and stuck between resistance from the long term trend line. If price sells off again and
breaks the 20 day MA, watch for possible support at the weekly lows near approx. 1.4200.
1.4100 is near the monthly and weekly pivot which may also provide support if tested on
Monday or Tuesday.
GBP/USD rallied to the 50 day MA on Friday and also double topped at the weekly highs and
is currently testing the 1.6400 level again for resistance. IF price rallies over the 50 day MA,
the next potential resistance is the fib target and weekly pivot beginning at 1.6481 and the next fib
target cluster at 1.6522. If price fails at the 1.6400 level and sells off the fib retracement levels
from last week’s range are currently 1.6296, 1.6261 and 1.6226.
USD/JPY sold off last week and found support at the long term lows from early July and rallying
on Thursday/Friday. IF price continues to rally from the strong support, the next potential
resistance are 93.52 and 93.88 as the 50/62% retracements from the high/low swings of the last
two weeks. IF price sells off again to retest the lows of last week, watch for possible support at
92.00 (support level from last week) and 91.37 (fib target.)
USD/CAD had a huge sell off after the NFP news was released and continued to sell off late
afternoon on Friday as price closed below the 20 and 50 day MA’s. IF the selling pressure
forces another sell off early this week, 1.0800 is the next major swing low point for potential
support and 1.0720 is the prior weekly low and fib target as well. IF price finds support and
rallies, the current fib retracements for last week that may offer resistance are 1.0930, 1.0963
and 1.0996.*
USD/CHF rallied hard after the NFP news but still found resistance at the 20 day MA and
previously strong resistance level where price has stalled several times in the past 10 days. IF
price again rallies on Monday, the next potential resistance is 1.0695 (weekly pivot and previous
swing high point) and 1.0714 (high from two weeks ago.) IF price sells off, 1.0550 has been
strong also been strong support in the past several weeks and may again provide support if
tested early this week.
Review on today’s trading
NEWS: GBP (25th-29th) Nationwide HPI
CHF 3:15 AM est Employment level
USD 10:00 AM est CB Consumer Confidence
EUR/USD had a low volatility inside ranging day as price failed to make a higher daily
high or lower daily low then Friday. If price breaks out from the consolidation on Tuesday,
the next possible support are the 38/50/62% retracement levels from last week’s high/low
which are currently 1.4250, 1.4210 and 1.4172. If price finds support at these levels and
rallied, watch for potential resistance at last week’s high of 1.4376 and the highs of the prior
week where price found resistance multiple times in the 1.4428- 1.4451 range.*
GBP/USD was contained in a sideways, inside channel for the majority of last week and
price sold off to find support at the bottom of this channel on Monday, just below the 50
day MA. IF price breaks from the channel and sells off, the next possible support is
1.6276 as the weekly lows from last week and 1.6220 which is a fib target and monthly
pivot where price could bounce. If price finds support at the bottom of the channel and
rallies, the top of the channel and high of last week is approx. 1.6624 and the next intra
weekly fib target for light possible resistance is 1.6700.
USD/JPY rallied to the resistance area mentioned in the trading letter yesterday where the
main MA’s that we use are currently clustered together along with the 38% retracement
of the prior two weeks which was the high of the day. This level, at 95.07 and the next
50% retracement of 95.59 will be the possible resistance levels for Tuesday. IF price
sells off, 94.05 is the current 62% retracement of last week’s low to this week’s high
for possible support and the low of last week at 93.43 is also a weekly pivot and may
offer support if tested this week.
USD/CAD has continued with the selling pressure of last week and trended down again
making new 10 day lows as price is fast approaching the current lows of the month for
support. If price continues to sell off, 1.0700 is an intra weekly fib target for light
potential support and 1.0640 is the approx. lows for August which may be support if
tested this week. If price rallies, 1.0877 and 1.0924 are the current 38/50% retracements
from last week’s high to this week’s current low for possible resistance. IF a NEW weekly
LOW is made, then these resistance fib levels will be changed.
USD/CHF had a inside, low volume, low volatility day and moved a small amount of its
daily ATR. Price is stuck at support and well below the 20/50 day MA’s. IF price
rallies, 1.0656 is a retracement cluster and weekly pivot and 1.0680 is the beginning of
the next fib retracement cluster for possible resistance. These levels are also identified
by the trade zones on your charts. IF price sells off, 1.0554 is the low of last week and
a monthly pivot and 1.0504 is a fib target for the next potential support levels for Tuesday.
Review on Monday
NEWS: EUR 5:00 AM est Industrial New Orders
CAD 8:30 AM est Core Retail Sales
NZD 11:00 PM est Inflation Expectations
EUR/USD had a big rally to open the session, retraced to 50% of the breakout then rallied
again to test the highs of the day. Currently Price is well above the 20 and 50 day MA’s but
may need to retrace to test support if the uptrend is to continue. IF price does sell off, 1.4250
is a fib retracement and weekly pivot and 1.4210 is the next long term 50% retracement for
possible support. IF momentum continues and takes price to test the highs, 1.4376 is the high
for last week and may again be resistance and 1.4441 is the next fib target from Friday’s
swing high/low.
GBP/USD rallied to double top at the previous weekly highs then sold off again, as price is
still contained between the 20 and 50 day MA’s as support and resistance. IF price rallies
to test the highs, 1.6624 is the high of last week and 1.6700 is the next fib target for potential
resistance for Monday. If price reverses and sells off, 1.6408 is the long term 62%
retracement and 1.6276 is the low of last week for high possible support for Monday as
well.
USD/JPY sold off on Friday to make new monthly lows then rallied hard in the afternoon
session and has since rallied early Sunday session to test the highs of Friday. IF price keeps
rallying 95.08 and 95.60 are the 38/50% retracements of the past several weeks where price
may find resistance. IF price sells off, 93.43 is the low of last week for possible support
if price tests this level on Monday or Tuesday.
USD/CAD also rallied heavily in the afternoon of the Friday session and is approaching the
potentially strong resistance where the 20/50 and 200 day MA’s are clustered. 95.08 and
95.60 are the next 38/50% retracements where price may find resistance. IF price sells off,
93.43 is the weekly low and weekly pivot for possible support and 92.65 is the next light
potential support point (fib target.)
USD/CHF sold off to major support for the lows of the week, where price is currently
testing again for support just above the monthly pivot. If price ultimately finds support here
and rallies, 1.0660 and 1.0681 are the next fib retracement levels from different weekly
and multi-weekly swings for possible resistance. IF price sells off, 1.0507 is a fib target
and 1.0477 is a fib target and weekly pivot for possible support as well.
Review on Wensday
NEWS: USD 8:30 AM est Core Durable Goods Orders
8:30 AM est FOMC Member Dudley speaks
10:30 AM est Crude Oil Inventories
2:00 PM est Beige Book
NZD 5:00 PM est Official Cash Rate
RBNZ Rate Statement
AUD 9:30 PM est Building Approvals
EUR/USD found resistance at the weekly highs and sold off rapidly to the long term 38% fib
retracement for the low of the day which were both trading zones. Price is over the 20/50
and 200 day MA’s but has met strong resistance levels as price has failed at this zone multiple
times this month. IF price rallies again, 1.4236 is the 62% retracement of Tuesday and 1.4291
is approx. last week’s high where price may be resistance on Wednesday. IF price sells off,
1.4123 and 1.4068 are the next long term fib retracement levels for potential support.
GBP/USD also rallied to strong resistance which has held since last May and sold off to double
bottom at the weekly lows from Sunday for the low of the day. Price is just above the 20 and
50 day MA which may act as support if tested this week. IF price rallies to retest the previously
mentioned resistance zone, watch for resistance from 1.6566-1.6586 (weekly pivot and last
week’s high) and at 1.6683 and 1.6743 which are fib projection targets from last week’s high/low
swing. If price sells off, 1.6354 is the next long term 38% fib retracement and 1.6311 is last
week’s low which may be support when tested.
USD/JPY sold off after finding strong resistance at the 200 day MA and sold off to just above
the 38% fib retracement from the lows of 2 weeks ago and this week’s high. If price sells off
again to test this mentioned level, 94.00 is the 38% level and 93.56 is the next 50% retracement
for possible support as well. IF price rallies on Wednesday, 95.29 is the weekly high and 96.10
is the next fib target cluster for possible resistance levels.
USD/CAD sold off again to barely make new lows for month as price is again testing the strong
support levels from the lows of late May. Price then quickly was bought and rallied for the rest
of the active trading session before selling back off showing indecision for the immediate price
direction for the rest of the week. IF price does fail at the support level just mentioned and rallies,
1.0930 and 1.0975 are the next longer term fib retracements which may be resistance if tested.
If price sells off again, 1.0669 and 1.0613 are the next fib targets from various intra-weekly
swings for possible support.
USD/CHF sold off briefly to double bottom near the weekly low then rallied heavily to make
new weekly highs just above last week’s high as price found resistance for the high of the day
at the 20 day MA. Price is stuck between strong support at lows from early June and resistance
from the 20 and 50 day MA’s resulting in the consolidating price action. IF price rallies, 1.0800
is approx the weekly high and 1.0818 is the next 62% fib retracement from 2 weeks ago high
to last week’s low for possible resistance. IF price sells off, 1.0634 is the weekly pivot and
begins the very strong potential support from the zone previously mentioned which may be
support and possible chance to get into a nice countertrend rally. IF this level is broken,
however, be aware that a very strong sell off is likely to potentially happen as stops are
triggered from people who have had long positions from the zone for the past several months.
Review on 21st
NEWS: CAD 9:00 AM est BOC Rate Statement / Overnight Rate
USD 10:00 AM est Fed Chairman Bernanke Testifies
AUD 9:30 PM est CPI
EUR/USD rallied up to make new monthly and 10 day highs and is approaching last
month’s high. The high of the day for Monday was a long range fib target and the next
possible resistance is the next fib target for this particular swing at 1.4317. The next
possible resistance is 1.4361. IF price sells off, 1.4133 is approx. the 62% retracement
for the week and 1.4089 is the next long term 38% retracement for potential support.
GBP/USD rallied up strongly after finding support at the 20 day MA and also made
new 10 day highs as price continued from last week’s rally. IF price keeps rallying up,
the next fib targets from Friday’s low to this week’s current high are 1.6655 and 1.6721.
IF price sells off, 1.6407 and 1.6374 are the 50/62% retracements from the previously
mentioned swing.
USD/JPY rallied to the 20 day MA and found resistance for the highs of the day then
sold off rapidly to make new daily/weekly lows. Price is still below the 20/50 and 200
day MA’s after rallying up to and correcting itself from the previous news related huge
sell off from weeks ago. Price is making lower lows in price at the time of publication.
IF price keeps selling off, 93.26 and 92.91 are the next major 50/62% retracements
for possible support. IF price rallies, 95.00 begins the next major possible resistance
zone.
USD/CHF had a steep sell off to open the trading session then consolidated for the
rest of the day. IF price continues to drop, as price appears to be bearish for the
early part of the week, the next possible support is 1.0597 and 1.0560. IF price
rallies, 1.0755 is the current 62% retracement from last Friday’s high to this week’s
current low and 1.0798 is the next major 50% retracement for possible resistance.
USD/CAD sold off below last week’s low and strong support to make new monthly
lows and found the low of the day at the fib target from last Wednesday’s move. IF
price keeps selling off, 1.0977 is the next fib target from the previously mentioned
swing and 1.0786 is last month’s low which may be strong potential support if tested
this week. IF price rallies, 1.1200 is the beginning of the next stronger possible
resistance cluster and 1.1267 is the next long term 38% retracement.
Review on 2nd of July
NEWS: EUR 7:45 AM est Minimum Bid Rate
USD 8:30 AM est Non-Farm Employment Change **
8:30 AM est Unemployment Rate
EUR/USD rallied up heavily after news was released at approx. noon est. pushing the
rally into new weekly highs through resistance. Price is still over the 20 and 50 day MA’s
and has been rallying for several weeks but a pullback may be due some point this week
because of being so overbought. IF price rallies again, watch for possible resistance at
1.4200 (currently weekly high) and at 1.4250 which begins a fib target cluster. IF price
sells off, 1.4056 and 1.4027 begin the next two fib retracement clusters for possible
support.
GBP/USD sold off to make new weekly lows, then found support at the next strong fib
38% retracemetn for the lows of the day. Price is still hovering over the 20 day MA.
IF price sells off and breaks below the 20 day MA, watch for a strong potential down
trending day. The next possible support is is the low of the week at 1.6382 amd the next
fib target of 1.6300. IF price rallies, watch for potential resistance at 1.6563 and 1.6606
which are the current weekly 50/62% retracements.
USD/JPY rallied to the top of the daily trend channel which also combined with the 20
and 50 day MA’s where price found resistance and sold off the rest of the day. Price
is likely to be bearish for the rest of the week because of the strong resistance but must
wait for further confirmation. IF price sells off, 96.00 is a fib retracement and 95.68
is the next longer term fib retracement for possible support. IF price rallies, 95.15 begins
the next resistance peaks from the past several weeks and is also a weekly pivot for
potential resistance.
USD/CHF sold off rapidly after the news release as price sold off to the 2nd buy zone
for the lows of the day and rallied back into the range. 1.0711 was the low of the day
on Wednesday and may again offer support if tested. The next possible strong support
is 1.0636 which beings a multiple support cluster and the low of last week. IF price rallies,
the current fib retracement levels that may offer resistance are 1.0800 and 1.0820.
Review on 1st of July 2009
NEWS: GBP 4:30 AM est Manufacturing PMI
USD 8:15 AM est ADP Non-Farm Employment Change**
10:00 AM est ISM Manufacturing PMI
10:00 AM est Pending Home Sales
AUD 9:30 PM est Trade Balance
EUR/USD rallied to last weeks high where price double topped, then sold off to the key
1.4000 level for the current low of the day. If price continues to sell off on Wednesday,
1.4000 may again be light support but use caution as this will be the 3rd time testing this
zone this week. The next possible higher percentage potential support it 1.3950, long term
fib retracement level, bottom on trend channel and half-number.) IF price rallies, watch
for light resistance at the weekly highs again at 1.4138 and at 1.4168 which is the previous
monthly high.
GBP/USD rallied over the top of the sideways consolidation channel then sold off quickly
resulting in the false breakout. This is generally a bearish sign, but IF price rallies to test the
highs of the channel watch for possible resistance at 1.6544, 1.6582 and 1.6620 which are
the current daily fib retracement levels for Tuesday’s sell off. IF ANY OF THESE levels
change after this letter is released they will updated on your trade zones as they appear on
your charts at midnight EST so please take note! If price continues the sell off, the next
possible support are the fib targets 1.6348 and 1.6300.*
USD/JPY sold off late in the JPY session yesterday then quickly rallied to make new weekly
highs as price should close over the 200 day MA. Price is now between the 200 and 20/50
day MA’s and may consolidate before breakout from these support and resistance zones. If
price rallies, 96.57 is last weekly high and 96.96 is the next fib target cluster which may offer
resistance. IF price sells off, 95.77 is a fib retracement cluster and 95.60 is the next longer
term 62% retracement for potential support.
USD/CHF sold off to test the 20 day MA then rallied for the rest of the day and found
resistance the next longer term 38% retracement for the current high of the day. IF price
continues to rally, the next possible resistance is 1.0900 and 1.0927 which represent fib
retracement levels from the most recent major swing from last week’s high to this week’s
current low. IF price sells off, 1.0800 begins the lowest support cluster which was the low
of the day. IF tested on Wednesday, this may again be support with the next possible
support beginning at 1.0711 (fib target cluster.)
USD/CAD rallied up to last weeks high where price found resistance and consolidated for
the rest of the day where price currently resides. IF price rallies and breaks through this
level, the next possible resistance is 1.1713 and 1.1759 as the fib targets from the most recent
swing. IF price fails at the current highs and sells off, 1.1519 and 1.1488 are the next longer
term fib retracement zones which may be support if tested.
EUR/JPY rallied up to Monday’s and last month’s high where price again found resistance
for the highs of the day and sold off back into the range. Price should close between the 20
and 50 day MA’s. Price closed out the day into a consolidating wedge pattern at the time
of publishing and should breakout nicely. IF price rallies up, the next possible resistance is
136.26 (long term 62% retracement) and 136.94 is a fib target cluster which begins the next
possible resistance zone.
GBP/JPY rallied to a fib target and sold off quickly to near the bottom of the multiday trend
channel. 158.00 is the bottom of the trend channel and 38% fib retracement and 157.16 is
the next 50% fib retracement wher price may find support. IF price rallies, 160.23 and
161.20 are fib targets which are also near the top of the previously mentioned trend channel
which may be resistance if tested.