As I mentioned in my blog yesterday, we have seen more USD
weakness as the market is anticipating a .25% rate cut by the
FOMC tomorrow afternoon. Again, the key factor on market
direction will be the comments following the rate decision. If
they follow up saying that they are considering dropping it
more, then I anticipate that we will see additional USD
weakness. If they comment that it is their intention for this
to be the last cut for a while than we will see some indecision
with an overall bullish dollar tone in my opinion. If for some
reason they do not lower rates then we could see some
significant USD strength.
The EUR/USD is in a wait and see mode as it has retested the
high of 1.4438 today. We are still holding our positions on
this trade at this point. The USD/CAD made a 60 pip bounce
from yesterday’s low of .9514 and just retested the low, so we
hope to see that as the bottom. Again, the rate decision
tomorrow will have a strong bearing on both of these trades.
LIVE TRADE CALLS FOR TOMORROW
We will have two potential trades tomorrow as the US GDP and
the Canadian GDP reports will both be released at 8:30 am EDT.
With the RSS software, we will have the ability to trade both
of these releases across multiple currencies.
For the US GDP, which will be Row 1, the expected number is
3.1%. A higher than expected number will be good for the USD
and signal a short on the GBP/USD. We will be looking for a
deviation of 0.4% on this report to trigger a safe trade. This
report last met our safe trigger in April, and we had traders
get in and report profits of 20-30 pips. To see a video of
April’s trade, click on the link below:
For the Canadian GDP, which will be Row 2, the expected number
is 0.0%. We will focus on the EUR/CAD for this release as the
US data is coming out at the same time. A higher than expected
number will be good for the CAD and signal a short on the
EUR/CAD and a lower than expected number will be bad for the
CAD and signal a long on the EUR/CAD. We will be looking for a
deviation of 0.3% on this report to signal a safe trade.
This report seldom meets our safe trigger, but we have had some
good moves when it has met our medium triggers. Our medium
triggers have been met three times this year, with the EUR/CAD
moving between 17 and 70 pips each time. This report last met
our medium trigger in June and the EUR/CAD moved 69 pips. To
see a video of June’s report, click on the link below:
This is our current outlook for these trades; however, it is
subject to change as market conditions may change by tomorrow.
Be sure to log in to the Live Trade Room fifteen minutes prior
to the releases to get my commentary on the trades.
