Game Plan for Week 27

The US dollar edged lower against every major currency except the Canadian dollar last week. Although I wrote that friday's session would be light, a surprise came as the Chinese renewed their challenge to the USD's status as world reserve currency.

This week, a number of major econmic announcements are due which would certainly give the market much volatility nnot seen in recent weeks.

Here's my daily game plan for week 27.

MONDAY, JUNE 29

BUY NZD/USD

At 6:45 am (Manila), New Zealand's Trade Balance data comes out. Expected to be better than previous, it should be bullish for the Kiwi.

BUY EUR/USD

At 5:00 pm (Manila), Eurozone consumer confidence data comes out, expected to be slightly better than previous. This should be bullish for the Euro.

TUESDAY, JUNE 30

I'm not trading on this day.

WEDNESDAY, JULY 1

BUY or SELL USD/JPY based on the all-important Tankan Indices. Disappointment could send the pair upward. In-line or better than expectation should be positive for the Yen.

BUY GBP/USD

At 4:30 pm, UK Manufacturing PMI will come out with number expected to be bullish for the Pound.

BUY EUR/USD, AUD/USD, NZD/USD

In the evening, a slew of US economic announcements come out. I am betting that better numbers concerning the US economy will make investors jump out o the low-yielding USD into the better-yielding high-beta currencies. Will watch price action on the daily and hourly charts and enter on setups.

THURSDAY, JULY 2

Will watch price action on the daily and hourly charts and scalp some pips. On this day, Euro Interest rate decision is due. Also, US Non-Farm Employment data comes out. Last month, US non-farm payrolls surprised the market. I do not expect such a surprise this time and so, with a combination of these two, I am more biased toward going LONG EUR/USD.

I will also be watching price action on the following pairs: GBP/USD, USD/CAD, AUD/USD, USD/JPY and NZD/USD and go LONG in case setups present themselves.

FRIDAY, JULY 3

US holiday. Will not trade. I expect light trading on this day.

Ending Week 26

I'm closing out the week (and the month). US economic announcements tonight are expected to come out mixed. This might cause uncertainty in today's trading. As such, I am staying on the sidelines.

This week I am up +324 pips and +2,592 pips for the month. 'Fantastic!' is my word for it.

Next week looks interesting with a number of major economic announcments up that could cause volatility in the FX market. These include Japan's Tankan Manufacturing Index (Wed), Euro Interest Rate (Thursday) and US Non-Farm Payrolls (Thu).

June Trade # 29 - BUY EUR/USD

June 25, 2009 11:52 am (Manila)

Trade is out at +24 pips/lot for a total of +144 pips. I decided to exit the trade as I will be unable to monitor this trade to spend time with my son who's celebrating his 2nd birthday today. Still, it was a great trade as I was able to gross over a hundred pips for the 2nd time (2 out of 3 trades) this week.

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June 25, 2009 8:23 am (Manila)

BUY EUR/USD @ 1.3946
Stop - 1.3876
Limit 1 - 1.3976
Limit 2 - 1.4007

Fundamental Reason: At 5:00 pm (Manila) today, Eurozone m/m Industrial Production Orders will come out. Expectation is that it will be flat (0.0% increase vs. previous contraction of -0.8%). This should be bullish for the Euro. As one of the largest industrial producing regions of the world, this data will matter for the Euro. Though relatively flat, it might mean that the pace of contraction in the Eurozone's economy is decelerating - raising optimism for growth in the coming months.

This is a leading indicator of production. Rising purchase orders signals that manufacturers will increase activity as they fill the orders. The effect will then trickle on to industries directly affected by Industrial Production - suppliers and contractors, for example.

SNB gives FX Market another jolt

The SNB (Swiss National Bank) gave the Forex market another 300-pip jolt (USD/CHF) today. The message to traders: "This is the way to test a Central Bank's resolve". When trader's sent the USD/CHF and EUR/CHF to the floor yesterday (1.0630 for the USD/CHF and 1.5011 for the EUR/CHF), the SNB intervened massively, selling off Swiss Francs and buying Euros and greenbacks, reminiscent of their March action.

There it goes. Despite the SNB's repeated statements that they do not have established levels where they want the Franc to stay, their actions just did not reflect that.

If I had been awake last night, I would have caught this steamroller from the get go.

Lesson learned here: Watch those levels on the Swiss Franc pairs and if they go anywhere near these lows, get ready to go LONG.

USD/CHF Hourly Chart (as of 6-25-2009)

June Trade # 28 - BUY GBP/USD

June 24, 2009 3:20 pm (Manila)

I'm a bit cautious on this trade as it's my first trade involving six (6) lots. Trade is out at +20 pips/lot for a total of +120 pips.

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June 24, 2009 2:30 pm (Manila)

BUY GBP/USD @ 1.6500 (6 lots)
Stop - 1.6480
Limit - 1.6520

Banking on broad dollar weakness and risk appetite. On the daily chart, this pair rallied yesterday and may continue its upside today. On the hourly chart, the pair took off after ranging for the past 12 hours.

June Trade # 27 - BUY USD/JPY

June 24, 2009 2:54 pm (Manila)

2nd half is out at breakeven.

Summary for this trade:

1st Half: +60 pips
2nd Half: 0 pips

Total: +60 pips

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June 24, 2009 1:20 pm (Manila)

Limit 1 has been hit at +30 pips/lot for a total of +60 pips.

Trade has been made risk-free now by moving 2nd half stops to breakeven.


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June 24, 2009 8:02 am (Manila)

BUY USD/JPY @ 95.35
Stop - 94.77
Limit 1 - 95.65
Limit 2 - 96.15

At 7:50 this morning, Japanese Trade Balance came out better than expected. I expect this data to push the Japanese Yen lower against the USD as investors jump to the higher yield of the greenback in the background of improving economic climate on the Japanese islands.