Written by dustin pass
Thursday, August 12th, 2010
TRADE CALL RECAPS
For our last live trade calls, we were looking at the Canadian and US Trade Balance reports yesterday morning. For the Canadian Trade Balance report, we recently raised our safe triggers so we were looking to buy the EURCAD and USDCAD if the number came out at least $1.5 Billion better than expected. The actual number came only $0.8 Billion worse than expected, so it did not meet our safe buy trigger.
For the US Trade Balance, we were looking to sell the EURJPY if the data came out at least $5.0 Billion worse than expected. The actual number came out with a -$7.8 Billion deviation, so it met our safe sell trigger and we entered a trade. The EURJPY initially only had a slight reaction to the data, so we recommended closing the trade as it did not move as expected. It did eventually trickle down 30-40 pips over the next 30 minutes as I mentioned it could in the Profit Center. Most traders reported small gains or small losses on the trade. The video for these trades is below.
httpv://www.youtube.com/watch?v=wbmQ7as8wIE
TRADE OPPORTUNITY TONIGHT
There is an opportunity to trade tonight when the NZD Retail Sales report is released at 6:45 pm EDT (10:45 pm GMT). The focus should be on the Retail Sales All Industries figure, and the expectation for this release is 0.5%. We have placed a safe trigger of 0.8% for this release.
We have historically seen moves of around 25 to 40 pips or more when this release has met the safe deviation. You will want to take caution as reports from New Zealand can come out late. If you see a strong move before the data comes out you will want to quickly turn off the auto-click. We will not have the Live Trade Room open for this trade, but I wanted to make you aware of the opportunity.
OUR NEXT LIVE ON THE NEWS TRADE CALLS
Our next live trade opportunities come tomorrow when both the US Retail Sales and US CPI reports are both released at 8:30 am EDT (12:30 pm GMT). Our main focus will be on the US Retail Sales report as it typically has a larger impact on the market. Our focus for this data is the Retail Sales Less Autos number, which is expected to be 0.5%. We will trade the EURJPY currency pair as it typically provides a better move on this data. We will look for a buy on the EURJPY if the number comes out better than expected.
We will most likely prefer a buy trigger on this report as better than anticipated data could help the stock market. I anticipate a 30-50 pip spike either way, but it may just be a temporary move if we get a sell trigger. We will use some caution on this trade as the US CPI data is coming out at the same time and could affect this trade negatively if it comes out strong in conflict with this data.
The US Retail Sales report has met our safe trigger eight times in the last year, and the EURJPY moved 30 to 85 pips each time. This report last met our safe trigger in June and we had traders report profits of up to 48 pips on the trade. Below is a chart showing the movement of the EURJPY at the time of June’s release:
The video of June’s trade is below:
httpv://www.youtube.com/watch?v=E7ObNgeSTss
For the US CPI data, the focus will be on the Core CPI number and the currency pair you should trade is the EURJPY as it typically moves much better than the GBPUSD. A higher than expected number will be good for the USD and signal a long on the EURJPY, and a lower than expected number will be bad for the USD and signal a short on the EURJPY. For the Core CPI figure, we will raise our safe trigger so we will be looking for a deviation of at least 0.2%.
We would typically anticipate a 20-40 pip move if this meets the raised safe trigger; however, this trade hasn’t moved the market as much recently. In addition, the other US data coming out tomorrow has the potential for a bigger move if our triggers are met on the Retail Sales data. If the two reports are conflicting, the odds are that the market will move more in the direction of the Retail Sales report.
This report has met our raised safe trigger two times in the last year, and the EURJPY moved 25 to 45 pips each time. This report last met our safe trigger in February and we had traders report profits of up to 10 pips on the trade. Below is a chart showing the movement of the EURJPY at the time of February’s release:
The video of February’s trade is below:
httpv://www.youtube.com/watch?v=8JQl8ffdx6U
This is our current outlook for this trade; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Profit Center (live trade room) 15 minutes prior to the release to get my commentary on this potential trade.
Good Luck!!!!
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