Fundamental Analysis
Tuesday, December 11th, 2007 (4:30 a.m. New York Time) UK
At 4:30 a.m. New York time we will have UK Trade balance coming out. It is expected to came out at -7.4 B versus 7.8 B last month. This indicator has been disappointing with smaller deviations so this indicator will probably need a deviation of 1 B or more. If it comes out at -8.5 B or more negative, it would be a sell signal on GBP/USD, good for 25 to 35 pips or so. On the other hand, if it comes out at -6.4 B or less negative, it should be a positive reaction on the pound, so GBP/USD should go up by 25 to 35 pips or so. It has been a quite shaky indicator recently but with such deviation it should still be tradable.
SUMMARY:
* Report: UK Trade Balance
* Sell on GBP/USD if the number will be -8.5 B or more nagative
* Buy on GBP/USD if the number will be -6.4 B or less negative
* If the trigger is hit, expect 25 to 35 pips or more in the first hour of the report
Tuesday, December 11th, 2007 (5:00 a.m. New York Time) EURO ZONE
At 5:00 a.m. New York time we will have German ZEW economic sentiment. This indicator needs about 15-25 deviation to move enough well. It is expected to come out at -34.5 versus -32.5 last month. If it comes out at -50 or more negative, EUR/USD may go down 20 to 30 pips or more. On the other hand, if it comes out at -20 or less negative, EUR/USD may go up by 20 to 30 pips or so in the first hour of the report.
SUMMARY:
* Report: German ZEW
* Sell on EUR/USD if the number will be -50 or more negative
* Buy on EUR/USD if the number will be -20 or less negative
* If the trigger is hit, expect 20 to 30 pips or more in the first hour of the report
Tuesday, December 11th, 2007 (2:15 p.m. New York Time) USA
At 2.15 p.m. New York time we will have U.S. Interest Rate Statement. It is expected they will cut rates from 4.50% to 4.25%. The futures are pricing in about 20% chance they may cut rates by 50 bp to 4.00%. If they cut the rates to 4.00%, it would be a buy signal on GBP/USD causing some major dollar weakness, and we should see a move of 70 to 100 pips or more. If they keep the rates unchanged at 4.50%, that would be dollar-strengthening, and we should see GBP/USD going down by 70 to 100 pips or more. If they cut the rates to 4.25% then the market reaction is going to be highly dependent on the statement released by Bernanke, and that is subject to a lot of interpretations. They have been pretty hawkish after the last cut but nobody listened to them and GBP/USD gained. That's why it is tough to say how the market is going to react to such comments. Unless you are experienced, I would stay away from it.
SUMMARY:
* Report: US Interests Rate Statement
* Sell on GBP/USD if they keep it unchanged
* Buy on GBP/USD if they cut the rates to 4.00%
* NO TRADE if they cut to 4.25%
* If the trigger is hit, expect 70 to 100 pips or more.
At 4:30 a.m. New York time we will have UK Trade balance coming out. It is expected to came out at -7.4 B versus 7.8 B last month. This indicator has been disappointing with smaller deviations so this indicator will probably need a deviation of 1 B or more. If it comes out at -8.5 B or more negative, it would be a sell signal on GBP/USD, good for 25 to 35 pips or so. On the other hand, if it comes out at -6.4 B or less negative, it should be a positive reaction on the pound, so GBP/USD should go up by 25 to 35 pips or so. It has been a quite shaky indicator recently but with such deviation it should still be tradable.
SUMMARY:
* Report: UK Trade Balance
* Sell on GBP/USD if the number will be -8.5 B or more nagative
* Buy on GBP/USD if the number will be -6.4 B or less negative
* If the trigger is hit, expect 25 to 35 pips or more in the first hour of the report
Tuesday, December 11th, 2007 (5:00 a.m. New York Time) EURO ZONE
At 5:00 a.m. New York time we will have German ZEW economic sentiment. This indicator needs about 15-25 deviation to move enough well. It is expected to come out at -34.5 versus -32.5 last month. If it comes out at -50 or more negative, EUR/USD may go down 20 to 30 pips or more. On the other hand, if it comes out at -20 or less negative, EUR/USD may go up by 20 to 30 pips or so in the first hour of the report.
SUMMARY:
* Report: German ZEW
* Sell on EUR/USD if the number will be -50 or more negative
* Buy on EUR/USD if the number will be -20 or less negative
* If the trigger is hit, expect 20 to 30 pips or more in the first hour of the report
Tuesday, December 11th, 2007 (2:15 p.m. New York Time) USA
At 2.15 p.m. New York time we will have U.S. Interest Rate Statement. It is expected they will cut rates from 4.50% to 4.25%. The futures are pricing in about 20% chance they may cut rates by 50 bp to 4.00%. If they cut the rates to 4.00%, it would be a buy signal on GBP/USD causing some major dollar weakness, and we should see a move of 70 to 100 pips or more. If they keep the rates unchanged at 4.50%, that would be dollar-strengthening, and we should see GBP/USD going down by 70 to 100 pips or more. If they cut the rates to 4.25% then the market reaction is going to be highly dependent on the statement released by Bernanke, and that is subject to a lot of interpretations. They have been pretty hawkish after the last cut but nobody listened to them and GBP/USD gained. That's why it is tough to say how the market is going to react to such comments. Unless you are experienced, I would stay away from it.
SUMMARY:
* Report: US Interests Rate Statement
* Sell on GBP/USD if they keep it unchanged
* Buy on GBP/USD if they cut the rates to 4.00%
* NO TRADE if they cut to 4.25%
* If the trigger is hit, expect 70 to 100 pips or more.
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