Top 5 09.10.13


DATE: Tuesday Sept 10, 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. NZD/USD – Credit Card Spending

Credit Card Spending expected @ 0.6% (6:45PM ET / 20:45)
Our View – Neutral
Reason -- Neutral
If Credit Card Spending rises by 1% or more = Buy NZD/USD
If Credit Card Spending falls by -1% or more = Sell NZD/USD

New Zealand credit card spending is not a huge market mover for the NZD/USD unless there is a big surprise. Therefore the data is best traded reactively. If credit card spending rises by 1% or more, the NZD/USD can be bought for a move higher. If credit card spending falls by 1% or more, the NZD/USD can be sold. REACTIVE TRADE


8000 cleared
8100 key upside resistance
7900 now support

The kiwi continues to show strength as 8000 is cleared but 8100 is much harder to break through for the pair.

2. AUD/USD – Chinese Industrial Production

Chinese Industrial Production expected @ 9.4% (1:30 AM ET / 5:30 GMT)
Our View – Bullish AUD
Reason – Sharp Rise in Imports
If Industrial Production exceeds 9.6 % = Buy AUD/USD
If Industrial Production growth is less than 9.0% = Sell AUD/USD

A handful of Chinese economic reports are scheduled for release tomorrow but we feel that industrial production will be the most important because it is a reflection of Chinese economic activity and internal demand. The sharp rise in exports in particular point to increased global activity which suggests that industrial production could surprise to upside. Therefore we feel that the data can be traded proactively or reactively. For those who choose to wait, if Chinese industrial production exceeds 9.6%, the AUD/USD can be bought for a move higher. If industrial production growth is less than 9%, the AUD/USD can be sold for a potential move lower. PROACTIVE or REACTIVE TRADE


.9200 cleared
.9250 next test for longs
.9100 now support

The Aussie reversal continues to gain momentum with the pair now clearing the 9200 level and longs eying 9250 next.

3. USD/TRL – Turkish Q2 GDP

Q2 YoY GDP expected @ 3.5% (3 AM ET / 7 GMT)
Our View – Neutral
Reason – Slightly Weaker trade and confidence
If GDP Growth is less than 2.8% = Buy USD/TRL
If GDP Growth exceeds 3.5% = Sell USD/TRL

Turkey’s second quarter GDP numbers will be released on Tuesday and economists are looking for acceleration in GDP growth. Since the country does not release consumer spending figures, the data is difficult to predict but we know that trade was weaker and confidence declined which raises doubt about the consensus forecast. As such, we believe the data is best traded reactively. If annualized GDP growth is less than 02.8%, we expect USD/TRL to rally. If annualized GDP growth exceeds 3.5%, we expect USD/TRL to weaken. REACTIVE TRADE


Big Reversal
2.0700 spike top
2.0000 key support

After making a spike top at 2.0700 USD/TRY is now making a fast reversal and 2.0000 support is a crucial hold for the pair to preserve the upside bias.

4. USD/ZAR – South Africa Current Account

Current Account Balance expected @ -195.5B (4 AM ET / 8 GMT)
Our View – Neutral
Reason – Neutral
If Current Account Deficit exceeds -225B = Buy USD/ZAR
If Current Account Deficit is less than -175B= Sell USD/ZAR

South Africa’s current account numbers are due for release tomorrow and for an export dependent country, this is a particularly important release. Unfortunately the data should only be traded reactively. If the current account deficit exceeds -225B, we expect USD/ZAR to rise. If the current account deficit is less than -175B, we expect USD/ZAR to decline. REACTIVE TRADE


Big reversal off highs
9.9000 tested
9.8000 key support

The USD/ZAR has posted a major reversal off the highs and the pair may now press into the 9.8000 level to test support.

5. USD/CAD – Canadian Housing Starts

Canadian Housing Starts expected @ 190K (8:15 AM ET / 12:15 GMT)
Our View – Neutral
Reason – Neutral
If Housing Starts are less than 180K = Buy USD/CAD
If Housing Starts rise by 200K or more = Sell USD/CAD

Canadian housing starts is not a huge market mover for the Canadian dollar unless there is a big surprise. This data is therefore best traded reactively. If housing starts are less than 180K, USD/CAD can be bought for a quick move higher. If housing starts rise by 200K or more, USD/CAD can be sold. REACTIVE TRADE


1.0350 probed
1.0500 still resistance
Downward bias remains

The downward bias in USD/CAD remains as the pair has tested the support at 1.0350 and could push lower to 1.0300 in days ahead.

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