Top 5 – 11.12.13

TOP 5 HOT IDEAS

DATE: Monday Nov 12, 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 – NAB Business Confidence



FUNDAMENTALS
NAB Business Confidence expected @ (7:30PM ET / 00:30 GMT)
Our View – Neutral
Reason -- Neutral
If Business Confidence index exceeds 17 = Buy AUD/USD
If Business Confidence Index is 7 or lower = Sell AUD/USD

With the recent unevenness of Australian data and the RBA’s outlook uncertain, any economic report from the country can have a meaningful impact on the A$. Unfortunately business confidence is difficult to handicap but we put the odds more in favor of a stronger release. We feel the data is best traded reactively. If the business confidence index exceeds 17, we expect the AUD/USD to rally. If the index drops to 7 or lower, we expect the AUD/USD to slide. REACTIVE TRADE

TECHNICALS

Downdraft continues
9350 tested
9300 next target of shorts

The Aussie correction continues with 9350 tested as it falls to fresh monthly lows and targets 9300 while 9500 is now hard resistance.

2. USD/JPY – Japanese Consumer Confidence

FUNDAMENTALS
Consumer Confidence expected @ 45.5 (12AM ET / 5 GMT)
Our View – Neutral
Reason – Neutral
If Confidence is less than 42 = Buy USD/JPY
If Confidence exceeds 48 = Sell USD/JPY

Japanese consumer confidence numbers are scheduled for release this evening and we do not expect the report to have a significant impact on the Yen unless there is a big surprise. Therefore the data is best traded reactively. If confidence is less than 42, USD/JPY can be bought for a move higher. If confidence exceeds 48, USD/JPY can be sold. REACTIVE TRADE

TECHNICALS

Holds above 99.00
99.40 key to upside
98.00 support

USD/JPY continues to hold above 99.00 but the pair needs to retake the 99.40 highs in order to make a run at the key 100.00 level.

3. EUR/USD – German Consumer Prices

FUNDAMENTALS
Final German Consumer Prices expected @ (2 AM ET / 7 GMT)
Our View – Neutral
Reason – Neutral
If CPI is revised up to 0% or higher = Buy EUR/USD
If CPI is revised down to -0.4% or more = Sell EUR/USD

German consumer prices are not expected to have a significant impact on the euro unless it is revised and if it is the impact could be significant since low inflation was the motivation behind the central bank’s decision to ease. We feel that the data is best traded reactively. If German CPI is revised up to 0% or higher, the EUR/USD can be bought for a stronger recovery. If CPI is revised down to -0.4% or lower, the EUR/USD can be sold. REACTIVE TRADE

TECHNICALS

3300 remains rock solid support
3400 recaptured
3450 key to further upside

EUR/USD continues to display very strong support at the 3300 level and now having recaptured 3400 it needs to retake the key resistance at 3450 to fully erase the drop from Friday.

4. GBP/USD – UK Consumer Prices

FUNDAMENTALS
Consumer Prices expected @ 0.3% (4:30 AM ET / 8:30 GMT)
Our View – Bearish GBP
Reason – Sharp Drop in Shop Prices
If CPI rises by 0.5% or more = Buy GBP/USD
If CPI rises by less than 0.1% = Sell GBP/USD

U.K. consumer prices are scheduled for release tomorrow and inflationary pressures are expected to slow due to a drop in shop prices. We feel that the data can be traded proactively or reactively. For those who choose to wait, if CPI rises by 0.5% or more, the GBP/USD can be bought for a move higher. If CPI rises by 0.1% or less, the GBP/USD can be sold. PROACTIVE or REACTIVE TRADE

TECHNICALS

5950 holds
6000 given
6100 now resistance

Cable continues to hold 5950 but is drifting lower having given up 6000 with 6100 now stiff resistance to upside. A break below 5950 opens a test of key 5900 support.

5. NZD/USD – RBNZ Stability Report

FUNDAMENTALS
RBNZ Stability Report expected @ (3PM ET / 20GMT)
Our View – No Trade
Reason – No Trade
If RBNZ grows less concerned about Financial Stability = Buy NZD/USD
If RBNZ grows less concerned about Financial Stability = Sell NZD/USD

The RBNZ releases its Financial Stability Report twice a year in which they share their concerns about the stability of the international and domestic financial markets. Their sentiment is difficult to handicap and therefore best traded reactively. If they grow more concerned about financial stability risks, the NZD/USD can be sold for a move lower. If they grow less concerned, the NZD/USD can be bought for a move higher. REACTIVE TRADE

TECHNICALS

8200 holds
8400 caps upside
Range remains in place

The 8200-8400 range remains in place in kiwi as the pair holds support at the lower level for now, but a break could open a run to 8000.

*Top 5 Archive Members Only Top 5

Leave a Comment

Your email address will not be published. Required fields are marked *