Pipcrawler's Picks Journal

[PipCrawler]

The US Dollar has made a nice run against the Canadian Dollar in the past week going from approximately 1.1080 to 1.1300 in the last six trading days. This move may be a little overbought now, so I’m looking for a short term sell off, and possibly a move back down to 1.1200. If this current downturn proves to be just a retracement, I will have a long trade ready to go. We have the UK and Euro interest rate statements tomorrow, and any kind of large US Dollar buying or sell off may affect this pair as well. So, be cautious around those releases.

• Long USD/CAD at 1.1280, stop at 1.1260, pt1 at 1.1300, pt2 at 1.1330
• Short USD/CAD at 1.1230, stop at 1.1250, pt1 at 1.1210, pt2 at 1.1190

Take care, good luck and good trading!

 

[PipCrawler]

It must be the rebel in me, because I’m going to go short on GBP/USD! Crazy says you?? Maybe it is, maybe it isn’t, but before you go saying, “Pipcrawler has done lost his mind!” hear me out… The market has been forecasting and getting ready for a weaker Employment number tomorrow. ADP, the largest payroll processing company in the US, reported a number of 78,000 new jobs in September and layoffs are up this year versus the same month last year. So, the market is getting ready for something lower than the consensus of 120K, possibly lower than 100K. Now, I’m not going to say it’s going to be higher or lower – I’m not a fortune teller, but what I’m going to do is play the possibility that the market may get it wrong and we see a stronger than expected NFP number. If the number comes stronger than expected, then this pro greenback market will push this pair down much, much lower. Basically I’m going for a high reward to risk ratio.

So, here’s the trade: Short one lot of GBP/USD at market. I already have one lot short at 1.8780. If you can’t get one lot in above 1.8760, then just skip the market order and wait for the limit enty orders. My stop on this lot is 1.8820, and my profit target on this lot is 1.8700.

Then enter limit orders:

• Short GBP/USD at 1.8725 stop at 1.8755, pt1 at 1.8700, pt2 at 1.8650

If I’m wrong, and the pair shoots up, then I only lose 40 pips on that one lot. I will then close the short limit orders to protect myself from whipsaws. If, I’m right – well, we can go celebrate the weekend early!

This is probably the craziest trade I’ve put on since I was a newbie, but it has a good reward-to-risk ratio if the market is proven wrong on the NFP number. It’s a good thing we’re demo trading this only.

Good luck and good trading!

 

[PipCrawler]

Right now it seems like Cable can’t fight the strong USD sentiment, even after so-so NFP numbers on Friday. On the daily chart, it looks like the market is about to break below a trendline formed from the lows on 09.10.2006 and 09.28.2006. We’re gonna go with the current trend by shorting below the previous low on the hourly chart, which happens to be right around the S1 line of the pivot point drawn. We do have event risk at 4:30 am EST with the UK Trade Balance report. Unless we see number significantly above the forecast of -6.2B, we will probably see a continuation of the current trend to the downsidde. So, be cautious during that period as we may see some whipsaw action. Here’s a short trade idea:

• Short GBP/USD at 1.8620 stop at 1.8640, pt1 at 1.8600, pt2 at 1.8560

Let’s start the new week off right!! Good luck and good trading!

 

[PipCrawler]

We’ve got a plain vanilla trade tonight on USD/CHF. Looks like price action has consolidated for the time being, waiting to breakout, so what’s the catalyst going to be?
Well, we have the US Trade Balance to be released tomorrow at 8:30 am EST. Economists are expecting a better number than the previous month and the market may have already price in these expectations, so we may see the pair drop after the release on profit taking. If the number comes out much higher than expected, then we may see the pair rise up higher. Regardless of a rise, I think the USD is in overbought territory and ready for a short term correction. So, let’s get ready to go short:

Short USD/CHF @ 1.2675, stop @ 1.2695, pt1 @ 1.2655, pt2 @ 1.2635

Good luck and good trading!

 

[PipCrawler]

Tomorrow should be an action packed day as we have multiple market movers coming in the pipeline starting with UK CPI at 4:30 am EST, followed by multiple US reports starting at 8:30 am EST – most notably, the US Producer Price Index at 8:30 am EST. Right now, it’s the silence before the storm as we see major currency pairs ranging before the open of the Euro trading session. I’m leaning towards a long trade as the current USD sentiment seems to be overbought, but we’ll have a short trade ready in case we see a lower CPI out of the UK and positive US data. Here we go:

Long GBP/USD @ 1.8670, stop @ 1.8650, pt1 @ 1.8690, pt2 @ 1.8715

Short GBP/USD @ 1.8580, stop @ 1.8600, pt1 @ 1.8560, pt2 @ 1.8540

Good luck and good trading!

 

[PipCrawler]

Last trade: -40 pips

Let’s first talk fundamentals of the Japanese Yen and US Dollar. Right now, the big news story for a bullish Yen is the report of how the Bank of Russia diversifies its reserves by increasing its Yen holdings up to “several percent.” Now, Russia holds over $260 billion in international reserves, so a “several percent” increase could mean lots of Yen buying. Couple this information with lower inflation data (which supports the notion of no more Fed rate hikes) and we could see this newly formed downtrend on the hourly chart continue. So we’ll just go with the flow and put up a short trade on this pair.

We do have event risk tomorrow morning at 8:30 am EST with the USD Consumer Price Index reports, so please be cautious during that time frame. Here we go:

Short USD/JPY @ 118.30, stop @ 118.55, pt1 @ 118.10, pt2 @ 117.90

Good luck and good trading!

 

[PipCrawler]

Here’s a nice little pattern on USD/CAD in which we may take advantage of my ideas on the US Dollar being short term overbought. I drew the rising trendline from a point starting back on Sept. 28. The pair has finally broke below that trendline, so we may to this pair reverse the uptrend IF it breaks below the horizontal price level drawn.

We do have event risk at the beginning of the US trading session with the Canadian International Securities Transactions report and the US Unemployment Claims report at 8:30 am EST. We also have the US Leading Indicators report at 10:00 am EST and the US Philadelphia Fed Index at 12:00 pm EST – both forecasting positive numbers for the US. Please be cautious during these times as we may see the USD continue it’s rally against the Loonie. Here’s a short trade idea:

Short USD/CAD @ 1.1330, stop @ 1.1360, pt1 @ 1.1300, pt2 @ 1.1280

Good luck and good trading!

 

[PipCrawler]

Last Pick: +80 pips

A slowing US economy has pushed the Greenback lower against many of the major currencies in the past couple of trading sessions. Right now, I see a lot of pairs have reverted back to the mean, so where do we go from here? Does USD continue to sell off or is it a great time to jump back in the Greenback? Well, for GBP/USD, we will see the third quarter, UK Gross Domestic Product number released at 4:30 EST. Analysts are predicting a healthy annualized growth of 2.7 percent. This growth and rising inflation concerns maybe enough to push the Bank of England to hike rates very soon, and traders are getting ready for it. So, I like a long trade on this pair. Here it is:

Long GBP/USD @ 1.8800, stop @ 1.8780, pt1 @ 1.8820, pt2 @ 1.8840

Good luck and good trading!

 

[PipCrawler]

Last Trade: +60 pips

Not much going on the economic calendar for tomorrow, but hopefully we can find an opportunity with the Confederation of British Industry (CBI) Industrial Trends Orders. The CBI reports the level of new orders placed with manufacturers. The market is predicting a negative number, so we could see a continued sell off in Cable against the Greenback if the came out inline or worse than expected.

On the chart, we see a reversal then a sharp drop in GBP/USD after a strong move upward from 1.8524 to 1.8860. We’ve seen this chart pattern before many times, so I’m betting that the pair will continue to drop after the small bounce from 1.8687. Here we go:

Short GBP/USD @ 1.8710, stop @ 1.8730, pt1 @ 1.8690, pt2 @ 1.8670

Good luck and good trading!

 

[PipCrawler]

Last Trade: +20 pips

Everyone has been waiting for the FOMC meeting all week, and now it’s here – how do we trade it? Well, economic data has been pointing to a slowing economy, but inflation is still a big concern with Fed officials. So, the question has been, “Does the Fed raise rates to curb inflation or does it lower interest rates to stimulate a slowing economy?”

A lot of analysts say neither – the Fed will be hawkish, but keep the rates the same. I like this view and looking at price action over the past couple of days I think we will see the Greenback drop if rates stay the same. Now, we have US existing home sales tomorrow, so we may see some movement around 10:00 am EST, otherwise we may not see much movement leading up to the FOMC interest rate statement at 2:15 pm EST. Here’s our short idea on USD for tonight:

Short USD/CHF @ 1.2625, stop @ 1.2655, pt1 @ 1.2605, pt2 @ 1.2560

Good luck and good trading!

 

[PipCrawler]

Last Trade: -46 pips

As I said in last night’s trade review, after the moderate Fed comments we should see a continued sell off in USD. Will it be enough to push USD/CHF below the S1 line at 1.2600? I don’t know. What may help our case is the release of US Durable Goods Orders at 8:30 am EST and US New Home sales at 10:00 am EST. We seen a pattern of disappointing US economic reports and I think we’ll see the trend continue tomorrow, especially after disappoint Existing Home sales numbers today.

Short USD/CHF @ 1.2590, stop @ 1.2615, pt1 @ 1.2570, pt2 @ 1.2530

Good luck and good trading!

 

[PipCrawler]

Last Trade: +20 pips

It’s been a pretty tough week for the Greenback with all the data pointing to a slowdown in the US. Is there relief in site for US Dollar bulls? In the short term – maybe there is. For the past three trading days we’ve watched USD beat down by Cable as the pair moved up almost 250 pips. We’re approaching short-term overbought territory, but we’re not there quite yet. Not until we hit 1.9000. So, we may see one last push as traders prepare for a US GDP report that is expecting to show slowdown in growth.

The possible relief I hinted at for the Greenback maybe a pull back on profit taking. If this happens, I see a perfect time to enter long if the pair reaches the 1.8800 price area. If this scenario plays out, I’ll definitely hold the position through the weekend into next week.

If the pair resumes its rise, I will look to buy above the previous high of 1.8926, and target 1.9000. Here are a couple of trade ideas:

Long GBP/USD @ 1.8940, stop @ 1.8920, pt1 @ 1.8960, pt2 @ 1.9000

Or

Long GBP/USD @ 1.8805, stop @ 1.8785, pt1 @ 1.8825, pt2 @ 1.8865

Good luck and good trading!

 

[PipCrawler]

We have one more trading day before the release of the Non-Farm Payrolls report on Friday, which means we will probably see more consolidation ahead of the report. We do have US economic reports starting at 8:30 am EST, but nothing significant enough to move the markets. The European Central Bank will be making an interest rate statement tomorrow at 7:45 am EST, and ECB Pres. Trichet will comment afterwards, but the markets are expecting no change. If we do see volatility, it would be a perfect opportunity to put on a range trade if market prices reached either the pivot S1 line or R1 line.

Short USD/CHF @ 1.2500, stop @ 1.2520, pt1 @ 1.2480, pt2 @ 1.2460

Or

Long USD/CHF @ 1.2390, stop @ 1.2370, pt1 @ 1.2410, pt2 @ 1.2440

Good luck and good trading!

 

[PipCrawler]

We’ve seen a huge USD sell off, US economy is slowing to a possible recession, and we have Non-Farm Payrolls expected tomorrow to report 125K new jobs were added. So, what’s a trader to do you ask? I say nothing. Everybody and their mama is waiting for this report, and once it’s released we’re going to see very, very dangerous trading conditions. If you are able to put in limit entry orders before the release or try to jump in at the market price after the report, you’ll probably experience slippage and get killed.

Traders have been hesitant this whole week to move money as the USD sell off has stalled, even when more weak US data was released. Tomorrow’s report will be the guidance we all need to make a move, but will we move right away? No. We will wait for the number to release and see the markets reaction before making a move. It’ll be tough tomorrow to watch the massive movements as some of us think we’ll be missing out on pips, but trust me – from the release of the report to about 20 - 30 minutes after, it is not a good time to enter trades. I will watch the market after the NFP report tomorrow and IF an opportunity shows itself I will post a trade idea on my blog at http://pipcrawler.blogspot.com. Stay tuned!

 

[PipCrawler]

Like I said in the weekly review, it was a boring day in the markets with the lack of any significant economic reports, and I expect the same tomorrow for the Greenback. For tonight, I am turning to the crosses, EUR/JPY in particular.

I’m looking for a reversal and short play in the pair as we have seen a bull run from 148.90 to 150.50 in recent trading sessions. I think this pair is almost overbought and a move up around 151 would put it there.

Taking a look at fundies, Bank of Japan Governor Toshihiko Fukui hinted at another interest rate hike by the end of the year. This was brought on by the concern of Yen weakness versus the Euro.

During the European session, we will see the release of the Eurozone monthly retail sales report. The forecast is at 0.1% which is lower than the previous number of 0.7%.

So, we have a couple of ideas supporting a short in EUR/JPY, but we will have to wait and see until tomorrow if there will be any volatility. Here are a couple of short trade ideas:

Short EUR/JPY @ 150.75, stop @ 150.95, pt1 @ 150.55, pt2 @ 150.10

Or

Short EUR/JPY@ 150.20, stop @ 150.40, pt1 @ 150.00, pt2 @ 149.70

Good luck and good trading!!

 

[PipCrawler]

Last Trade: -40 pips

At first, I wasn’t going to post up a pick tonight because of the US mid term elections taking place. The uncertainty of the outcome of who will control the House and the Senate was enough to keep me out until the results are in, but as I was reading around the internet, reports of the Democrats taking control of the House of Representatives were hitting the news services. While the results of the US Senate are still up in the air, even if the Republicans maintain control, the political gridlock should push the Greenback down further. If the Democrats (who are known for tight fiscal policies) take control the Senate as well, we’ll most likely see the USD drop. So, here’s a trade idea to go with the current short term trend.

Short USD/CHF @ 1.2460, stop @ 1.2490, pt1 @ 1.2440, pt2 @ 1.2420

Good luck and good trading!

 

[PipCrawler]

Last Trade: -40 pips

Now that the Democrats have taken the House and may tie with the GOP for Senate control, we can get back to economic data. I think a lot of traders have stayed on the sidelines to avoid the choppy markets that the mid-term elections and lack of data have produced. We have a couple of significant events coming up with the Bank of England rate decision and the US Trade Balance report.

The market is expecting the BoE to raise rates to 5.00% amidst the recent strength in economic data. This notion has been already priced into the pair, what traders will be focusing on is the language of the BoE after the announcement. Will there be another rate hike to 5.25% soon after? That’s the question of the day. I think with the long bull run in GBP/USD, profit taking off of this data is a great opportunity to short the pair.

Soon after the BoE decision, we have US Trade Balance number at 8:30 am EST. Consensus is at -66.0B versus the previous number of -69.9B. If you recall last month, the Trade Balance number came out way worse than expected and the USD shot up! Tomorrow’s release may be better than expected with lower oil prices factored in.

So, we’re looking for a short tomorrow, so here’s a trade idea:

Short USD/CHF @ 1.8985, stop @ 1.9015, pt1 @ 1.8965, pt2 @ 1.8925

Good luck and good trading!

 

[PipCrawler]

Last trade: -60 pips


We have a couple of major US economic reports tomorrow morning at 8:30 am EST with the monthly US Producer Price Index and US Retail Sales. The US Retail Sales numbers will be more closely watched as the PPI numbers are almost guaranteed to be lower because of lower energy prices, but the Retail Sales number should give the Greenback a boost with a surprise uptick from the previous number. This will play very well into the new short-term uptrend, and we will look to get in long at a great price if the pair drifts lower before the news reports. It’s a new week, so let’s get cracking!

Long USD/CAD at 1.1330, stop at 1.1310, pt1 at 1.1350, pt2 at 1.1390

Good luck and good trading!

 

[PipCrawler]

With constant data out of the US showing a slowing economy, and speculation of a possible Japanese rate hike, I am looking for a short in USD/JPY. Japan did release their Tertiary Industry Index number earlier at -1.3%, which was lower than expected, so we may see the Yen weaken during the Asian trading session. If the pair hits the 118.00 area, this would be a nice time to jump in to short and play the upcoming US reports of the Empire Manufacturing Index at 8:30 am EST and the FOMC Meeting Minutes at 2:00 pm EST. The markets may be quiet before these reports, but we may see USD/JPY drift lower as it prices in the data, which is expected to disappoint.

Depending on price action during the Euro session, I may adjust the entry orders in the morning if our trade is not triggered. So, check out my blog in the morning (around 8:00 am EST) for any adjustments.

Short USD/JPY at 118.10 , stop at 118.30, pt1 at 117.90, pt2 at 117.70

Good luck and good trading!

 

[PipCrawler]

Last Trade: +20 pips

For tonight’s pick, we’re gonna hop on this wild ride called “Cable” and ride it down as the Greenback has been gaining ground against it as of late. We have a couple of big data reports coming up today with GBP Retail Sales number and US CPI data. Now, the GBP Retail sales number is forecasted to grow at 0.2%, but I think we may see a weaker number, especially with all of the weak data out of the UK recently. Also, US CPI will be released at 8:30 am EST, and with the Fed still concerned about inflation, this report will be closely watched and we may see a strong market reaction if the core CPI number is higher than expected. Going with these ideas and being that GBP/USD has been in a monster downtrend, I think a short play on GBP/USD is a great play for tonight. Here we go:

Short GBP/USD at 1.8875 , stop at 1.8900, pt1 at 1.8850, pt2 at 1.8825

Good luck and good trading!