Top 5 – 04.29.13

TOP 5 HOT IDEAS

DATE: Monday April 29, 2013

Guidelines for Top 5 Trading:
Proactive –
Enter trade 20 minutes before data, 25 pip stop, 25 pip first target
Reactive – Enter trade 5 minutes after data release, 20 pip stop, 15 pip target

1. AUD/USD – Chinese Leading Index



FUNDAMENTALS
China Leading expected @ (9pm ET Sat / 1 GMT)
Our View – Neutral
Reason – Neutral
If Leading Index exceeds 102 = Buy AUD/USD
If Leading Index drops to 99.5 or lower = Sell AUD/USD

China’s leading index will be released on Saturday evening and so the only opportunity would be trade the data reactively. The number should not have a huge impact on the AUD/USD unless there is a big surprise. If the leading index exceeds 102, AUD/USD can be bought for a quick move higher. If the index drops to 99.5 or lower, the AUD/USD can be sold. REACTIVE TRADE

TECHNICALS

1.0300 fails to hold
1.0250 still supports
Break leads to test of lows at 1.0150

The Aussie failed to take out the 1.0300 level again but managed to told 1.0250 support for now. A break lower however, opens the prospect of a possible test of lows at 1.0150

2. GBP/USD – Hometrack House Prices



FUNDAMENTALS
Hometrack House Prices expected @ (7:01 PM ET / 23:01 GMT)
Our View – Neutral
Reason – Neutral
If House Prices grow by 1% = Buy GBP/USD
If House Prices drop by 0.3% or more = Sell GBP/USD

U.K. house prices are scheduled for release tomorrow and we don’t expect it to have a significant impact on the GBP unless there is a large surprise. As a result, the data is best traded reactively. If house prices grow by 1% or more, the GBP/USD can be bought for a move higher. If it drops by 0.3% or more, the GBP/USD can be sold. REACTIVE TRADE

TECHNICALS

Stops just short of 1.5500
Holds above 1.5450
1.5400 supports

GBP/USD remains well bid as it stops just short of the 1.5500 but remains well bid above 1.5450. 1.5400 is key support to downside while 1.5500 break to upside opens run to 1.5700.

3. USD/SGD – Singapore Unemployment Rate

FUNDAMENTALS
Unemployment Rate expected @ 1.9% (10 PM ET / 2 GMT)
Our View – Neutral
Reason – Neutral
If Unemployment Rate exceeds 2.8% = Buy USD/SGD
If Unemployment Rate is 1.7% or less = Sell USD/SGD

Unemployment numbers are important for every country and Singapore is no exception. However the data will only have an impact on USD/SGD if there is a large enough surprise so therefore it is best traded reactively. Economists are looking for a huge improvement in the jobless rate. If the unemployment rate does not improve and stays or exceeds 2.8%, USD/SGD can be bought for a move higher. If it drops to 1.7% or less however, USD/SGD can be sold. REACTIVE TRADE

TECHNICALS

Correction could test support at 1.2314
1.2425 caps
Break of 1.2300 opens run to 1.2200

USD/SGD continues to slip lower and a test of 1.2314 lows if broken opens up a run to 1.2200

4. EUR/USD – Eurozone Confidence

FUNDAMENTALS
Eurozone Confidence @ 89.4 (5 AM ET / 9 GMT)
Our View – Bearish EUR
Reason – Weaker ZEW, IFO and PMI
If Eurozone Confidence index exceeds 91 = Buy EUR/USD
If Eurozone Confidence index drops below 87 = Sell EUR/USD

We have strong reasons to believe that confidence across the Eurozone declined in the month of April because we have seen broad based weakness reported by the ZEW, IFO and PMI reports. The data can be traded proactively or reactively. For those who choose to wait, if the Eurozone confidence index exceeds 91, the EUR/USD can be bought for a further move higher. If it drops below 87, the EUR/USD can be sold. PROACTIVE or REACTIVE TRADE

TECHNICALS

1.3000 continues to hold
1.2950 key support
1.3125 break opens upside

The euro continues to find support at the key 1.3000 level with 1.2950 providing deeper support to the downside. Meanwhile a break of 1.3125 opens the upside run tilting the bias to more more bullish posture.

5. USD/JPY – Personal Income and Personal Spending



FUNDAMENTALS
Personal Income expected @ 0.4% & Personal Spending expected @ 0.1% (8:30 AM ET / 12:30 GMT)
Our View – Bearish USD
Reason – Lower average hourly earnings and retail sales
If Personal Income AND Spending exceeds 0.5% = Buy USD/JPY
If Personal Income AND Spending grows by less than 0.1% = Sell USD/JPY

We have strong reasons to believe that personal income and personal spending will fall short of expectations because lower average hourly earnings suggest weaker personal income and lower retail sales suggests weaker personal spending. As a result, we believe that the data can be traded proactively or reactively. For those who choose to wait, if personal income and spending exceeds 0.5%, USD/JPY can be bought for a recovery trade higher. If personal spending and income grows by less than 0.1%, USD/JPY can be sold. PROACTIVE or REACTIVE TRADE

TECHNICALS

98.00 gives ways
Correction in full force
97.50 next level of support

USD/JPY correction is in full force as 100.00 looks a distant memory. The downside now eyes 97.50 while only a retake of 99.00 changes the bearish bias.

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