Forex Diamonds
Text summary of the video:
- Yesterday saw the Euro stay in it's range still trying to make its mind on whether to follow the fundamentals higher or the technicals lower. Watch the video for more info on how we're looking to identify the ultimate trend on the EUR/USD. On yesterday's news, the UK Retail Sales worked perfectly in line with what we were looking for. It came in quite low and bottomed out in the first 2 minutes, retraced to prerelease, and reattempted the lows, so any of the trades we recommended trying would have worked rather well for that one. The other news yesterday came out too close to expected to get much market reaction. Gold may have peaked today for the short term around 946 to start a run lower, but it could make another high before turning lower. To maintain our downwards bias though, we need to see gold stay below its 967 highs from last week. Stocks peeked out to slight new highs, but I'm not convinced yet we have a clear break higher with a lot of momentum. It's looking more and more like it's ending it's record-breaking monthly surge and going to see some considerable profit taking; however, picking the top has been troublesome and I think picking the bottom of the coming retracement will be a clearer opportunity. For tomorrow's news:
- UK GDP 4Q final (-1.5% expected) - I think even a 0.1% deviation can give GBP/USD a scalpable 25-35 pip move if the pair is trading calmly enough at the time. A 0.2%+ deviation should give more like a 35-50 pip move, but take somewhat conservative profits as this likely won't be a trend setter.
If it comes out at -1.4% or higher, GBP/USD should rise by 25-35 pips (or more if the deviation is larger).
If it comes out at -1.6% or lower, GBP/USD should fall by 25-35 pips (or more if the deviation is larger).
- 0830 Various US Data including Income (-0.1% expected), Spending (0.2% expected), and Core PCE m/m (0.2% expected) - I would only look to trade these if the PCE comes out as expected or close (within 0.1%). If there's no surprise there, I would look to trade a 0.5% deviation on either Income or Spending as long as there's no conflict. A 1.0% deviation is a much bigger deal.
If Income or Spending come out higher than expected by 0.5% or higher and neither comes in low, EUR/USD should rise by about 30 pips
If Both Income and Spending come out higher than expected by 0.5% or either comes in higher by 1.0%, EUR/USD should rise by about 50 pips
If Income or Spending come out lower than expected by 0.5% or lower and neither comes in high, EUR/USD should fall by about 30 pips
If Both Income and Spending come out lower than expected by 0.5% or either comes in lower by 1.0%, EUR/USD should fall by about 50 pips
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