The ShadowTraderPro FX Trader is your daily companion to the foreign exchange markets. Each issue contains a look at an emerging currency trade setup from a technical perspective, along with selected news on the four major pairs and a full economic calendar specifically tailored to the Forex trader. The report also contains potential FX trade setups which are listed with defined entry, defined target and defined stop. Subscribers receive email confirmations and updates on these trades so that they can follow along.
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Dollars & Sense
Good evening Forex Traders. The dollar lost some ground earlier in the day but was able to gain back and close positive for the day. The equity markets ran up and down and ended flat. The market seems to be preparing for ADP employment data as a preliminary indication of employment data on Friday. The pressure building in the market this week could provide for multi week trends in the days to come.
The EUR/USD traded in a wide range before selling off today, dropping over 120 pips from the high. The pair appears to be coiling but is doing so with a lot of volatility. We will wait until it breaks out of this consolidation and our Fib levels.(see EUR/USD below)
The GBP/USD’s trade triggered and has dropped about 100 pips. We still expect the pair to drop further and reach our target. The target is 1.5895 still but we will exit if we get higher lows intraday.(below).
The AUDJPY broke higher than our previous resistance and pulled back. The pull back was in line with previous resistance and so we re-anchored our Fibonacci levels. If price closed above 83.60 we will plan on buying this pair as a confirmed support bounce.(below).
The GBP/CAD has returned back to support near 1.66. Based on price action this pair will likely break through support and run down 450 pips or more or bounce and run up 450 pips or more. We will watch for a close on the 4 hour charts beyond one of these barriers.(below).
Major Pair Scoop
(Reuters) - The dollar fell against the euro on Wednesday after minutes from the U.S. Federal Reserve's latest policy meeting suggested the possibility of more stimulus measures for the economy.
The dollar also pared gains versus the yen, although it remained higher on the day. The yen has been pressured by uncertainty surrounding the resignation of Japan's finance minister.
Over the past month, the dollar had risen on expectations an improving economy would prompt the Fed to hike interest rates sooner rather than later. Analysts said the minutes are likely to dampen speculation the central bank would tighten any time soon.
In the minutes, Fed officials expressed concern the winding down of the central bank's massive purchases of mortgage securities could hurt the housing market. Some said persistently high unemployment might make it desirable at some point to expand or extend asset purchases
"The Fed headline discussing the possibility of more stimulus for the U.S. economy was surprising and has caused the dollar to weaken especially against the euro," said Amelia Bourdeau, senior currency strategist at UBS in Stamford, Connecticut. "What that suggests is that the U.S. economy is not out of the woods yet."
The euro rose to a session high of $1.4434, according to Reuters data, and was last up 0.3 percent at $1.4410 EUR=.
The dollar rose 0.7 percent to 92.35 yen, off a high of 92.74 yen JPY= hit earlier in the day. The euro rose 1 percent to 133.13 yen EURJPY=R.
The yen came under pressure after news of Japanese Finance Minister Hirohisa Fujii's resignation. His departure could add to challenges for the Japanese government as it wrestles with deflation, a fragile economy and huge public debt.
Most analysts expect little impact on Japan's currency policy, which is controlled by the finance ministry. But some say Deputy Prime Minister Naoto Kan, who will succeed Fujii, may be less tolerant of letting the yen rise and putting at risk a fragile export-led recovery.
"I think the market is a little bit more unsure not only on the currency side, but also on the government finances side," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. "It created uncertainty and the market saw that as enough reason to sell the yen."
PAYROLLS IN FOCUS
The ICE Futures U.S. dollar index, which measures the value of the greenback versus a basket of six major currencies, fell 0.2 percent to 77.459 .DXY.
Major currencies will likely stay in ranges ahead of a key U.S. jobs report on Friday, which could help shape the outlook for U.S. interest rates and the direction of the dollar.
Economists on average forecast U.S. job losses of 8,000 for last month, according to a Reuters poll.
Earlier, data from ADP Employment Services showed the U.S. private sector lost 84,000 jobs in December. That was fewer than the 145,000 jobs lost in November, but exceeded the 73,000 economists had expected.
"Clearly, we're still far from seeing jobs growth in the economy," said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York. "The most important thing is the trend in employment continues to improve."
A separate report from the Institute for Supply Management said its services index rose to 50.1 in December, above November's 48.7 but below economists' median forecast of 50.5. (Additional reporting by Gertrude Chavez-Dreyfuss; Editing by James Dalgleish)
FX Economic Calendar
Up and coming economic data relative to FX markets that may move markets this week.
| Date | Time (GMT) | Currency | Description | Importance | Forecast | Previous |
|
1/7/2010 |
12:00 AM |
GBP |
Bank of |
High |
0.50% |
0.50% |
|
1/7/2010 |
12:00 AM |
GBP |
Bank of |
High |
200B |
200B |
|
1/7/2010 |
12:00 AM |
JPY |
Official Reserve Assets (DEC) |
High |
|
$1073.7B |
|
1/7/2010 |
12:00 AM |
EUR |
Official Reserve Assets (DEC) |
High |
|
|
|
1/7/2010 |
8:15 AM |
CHF |
Consumer Price Index (MoM) (DEC) |
Medium |
0.00% |
0.20% |
|
1/7/2010 |
8:15 AM |
CHF |
Consumer Price Index (YoY) (DEC) |
Medium |
0.50% |
0.00% |
|
1/7/2010 |
10:00 AM |
EUR |
Euro-Zone Retail Sales (MoM) (NOV) |
Medium |
0.10% |
0.00% |
|
1/7/2010 |
10:00 AM |
EUR |
Euro-Zone Retail Sales (YoY) (NOV) |
Medium |
-1.80% |
-1.90% |
|
1/7/2010 |
10:00 AM |
EUR |
Euro-Zone Consumer Confidence
(DEC) |
Medium |
-16 |
-17 |
|
1/7/2010 |
3:00 PM |
CAD |
Ivey Purchasing Managers Index
(DEC) |
Medium |
|
55.9 |
|
1/8/2010 |
12:00 AM |
CAD |
Net Change in Employment (DEC) |
High |
20.0K |
79.1K |
|
1/8/2010 |
12:00 AM |
CAD |
Unemployment Rate (DEC) |
Medium |
8.40% |
8.50% |
|
1/8/2010 |
5:45 AM |
CHF |
Unemployment Rate s.a. (DEC) |
Medium |
4.20% |
4.10% |
|
1/8/2010 |
6:45 AM |
CHF |
Unemployment Rate (DEC) |
Medium |
4.40% |
4.20% |
|
1/8/2010 |
7:00 AM |
EUR |
German Trade Balance (euros) (NOV) |
Medium |
12.0B |
13.6B |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Input n.s.a. (MoM) (DEC) |
Medium |
-1.00% |
0.10% |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Input n.s.a. (YoY) (DEC) |
Medium |
6.10% |
4.00% |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Output n.s.a. (MoM) (DEC) |
Medium |
0.20% |
0.20% |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Output n.s.a. (YoY) (DEC) |
Medium |
3.10% |
2.90% |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Output Core n.s.a. (MoM) (DEC) |
Medium |
|
-0.10% |
|
1/8/2010 |
9:30 AM |
GBP |
Producer Price Index Output Core n.s.a. (YoY) (DEC) |
Medium |
1.90% |
2.00% |
|
1/8/2010 |
10:00 AM |
EUR |
Euro-Zone Gross Domestic Product s.a. (QoQ) (3Q F) |
High |
0.40% |
0.40% |
|
1/8/2010 |
10:00 AM |
EUR |
Euro-Zone Gross Domestic Product s.a. (YoY) (3Q F) |
High |
-4.10% |
-4.10% |
|
1/8/2010 |
10:00 AM |
EUR |
Euro-Zone Gross Fixed Capital (QoQ) (3Q F) |
Medium |
-0.80% |
-0.40% |
|
1/8/2010 |
10:00 AM |
EUR |
Euro-Zone Unemployment Rate (NOV) |
High |
9.90% |
9.80% |
|
1/8/2010 |
10:00 AM |
EUR |
Euro-Zone Household Consumption (QoQ) (3Q F) |
Medium |
-0.20% |
-0.20% |
|
1/8/2010 |
11:00 AM |
EUR |
German Industrial Production s.a. (MoM) (NOV) |
Medium |
1.00% |
-1.80% |
|
1/8/2010 |
11:00 AM |
EUR |
German Industrial Production n.s.a. and w.d.a. (YoY) (NOV) |
Medium |
-8.00% |
-12.40% |
|
1/8/2010 |
1:30 PM |
USD |
Change in Non-Farm Payrolls (DEC) |
High |
0K |
-11K |
|
1/8/2010 |
1:30 PM |
USD |
Unemployment Rate (DEC) |
High |
10.00% |
10.00% |
|
1/8/2010 |
1:30 PM |
USD |
Change in Manufacturing Payrolls
(DEC) |
Medium |
-35K |
-41K |
|
1/8/2010 |
1:30 PM |
USD |
Average Hourly Earnings (MoM) (DEC) |
Medium |
0.20% |
0.10% |
|
1/8/2010 |
1:30 PM |
USD |
Average Hourly Earnings (YoY) (DEC) |
Medium |
|
2.20% |
FX Trader Live Calls
Note: As currency markets are open around the clock, some action in plays can and will occur outside of U.S. trading hours. Please note that emails are only sent to clients between the hours of 9:00am EST to 5:00pm EST, Monday through Friday. Any trade action happening outside of these hours will be confirmed in an email the following morning.
Long Ideas
| Symbol | Trigger Price |
Stop Price | Target Price |
Type | Notes |
|---|---|---|---|---|---|
| none |
| Symbol | Trigger Price |
Stop Price | Target Price |
Type | Notes |
|---|---|---|---|---|---|
| none |
FX Trader Portfolio
| pair | type | dir | size | date entered |
entry price |
date closed |
exit price |
target | stop | status | mark to market |
p&l pips |
p&l capital |
capital commit |
OPEN POSITIONS - week of 01/04 - 01/08 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| none | ||||||||||||||||
 |
||||||||||||||||
| CLOSED POSITIONS - week of 01/04 - 01/08 | ||||||||||||||||
| GBP/USD | D | short | 1 | 01/05/10 | 1.6052 | 01/06/10 | 1.5972 | n/a | n/a | closed | n/a | 80 | $80 | $161 | ||
| |
The pair was unable to break support so we took profits as it became more volatile this morning. We now are watching for our system trade. | |||||||||||||||
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Click here FX Trader Live Calls Performance - 2009
Click here for FX Trader Performance - 2008