Top 5 11.19.13


DATE: Tuesday, Nov 19, 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 – RBA Minutes

RBA Minutes expected @ (7:30 PM ET / 0:30 GMT)
Our View – Neutral
Reason -- Neutral
If RBA Minutes are neutral = Buy AUD/USD
If RBA minutes are dovish = Sell AUD/USD

The minutes from the most recent RBA meeting will be released this evening. Despite improvements in Australia and China’s economy, the RBA statement was more dovish than investors had anticipated with the RBA specifically concerned about the exchange rate. While they are in no rush to raise rates, the real Q for the AUD is whether they are still open to cutting rates. If the RBA is neutral, the AUD/USD could extend is gains. If additional easing remains on the table, the AUD/USD could resume its slide. REACTIVE TRADE


9400 fails to hold
9350 support holds
Break could send directional signal either way

AUD/USD failed at its 9400 attempt to breakout but also held above the 9350 support as the tight range could be resolved with a break either way.

2. USD/JPY – Japanese Department Store Sales

Nationwide Department Store Sales expected @ (0:30 AM ET / 5:30 GMT)
Our View – Neutral
Reason – Neutral
If Dept Store Sales growth slows to 1% or less = Buy USD/JPY
If Dept Store Sales growth rises by 4% or more = Sell USD/JPY

Japanese department store sales are due for release this evening and it should not have a big impact on USD/JPY unless there is a big surprise. We feel the data only be traded reactively. If Department Store Sales growth slows to 1% or lower, USD/JPY can be bought for a move higher. If department store sales growth rises by 4% or more, USD/JPY can be sold. REACTIVE TRADE


100.00 does not hold
Support just underneath
99.00 deeper support

USD/JPY could not push through the 100.50 level and then reversed failing to hold 100.00 suggesting that upside momentum may be failing. 99.00 is deep support for now, but 100.40 key to upside.

3. EUR/USD – German ZEW

ZEW Survey expected @ 54 (5 AM ET / 10 GMT)
Our View – Neutral
Reason – Neutral
If the ZEW survey exceeds 56 = Buy EUR/USD
If the ZEW survey is less than 52 = Sell EUR/USD

The German ZEW survey is a fairly important release for the EUR but one that is difficult to handicap. While German economic data deteriorated, economists are looking for the recent rate cut to drive up confidence. The data is best traded reactively. If the ZEW survey exceeds 56, the EUR/USD can be bought for a quick move higher. If the ZEW survey drops to 52 or lower, the EUR/USD can be sold. REACTIVE TRADE


3550 caps the move
3400 remains support
3500 key hold

EUR/USD rally remains in place but 3550 continues to caps the move so far and the pair needs to clear that level in order to make a run at the bigger resistance at the 3600 level.

4. USD/TRL – Turkish Rate Decision

Benchmark Repo Rate expected @ 4.5% (7 AM ET / 12 GMT)
Our View – Neutral
Reason – Neutral
If Rates are cut to 4.25% = Buy USD/TRL
If Rates are raised to 4.75% = Sell USD/TRL

Turkey’s central bank is expected to leave interest rates unchanged today. The only opportunity to trade the release would be if rates were changed so it is best to wait for the announcement before taking a trade. If interest rates are cut 25bp, we expect USD/TRL to rise. If interest rates are raised 25bp, we expect USD/TRL to fall. REACTIVE TRADE


2.5000 puts in a top
Shorts target 2.0000
Lower highs suggest downward bias

USD/TRY is pressing towards the 2.0000 level as lower tops suggest a downward bias.

5. NZD/USD – Producer Prices

PPI expected @ (4:45 PM ET / 21:45 GMT)
Our View – Bullish NZD
Reason – CPI Increased in Q3
If PPI growth exceeds 1.0% = Buy NZD/USD
If PPI growth is less than 0.5% = Sell NZD/USD

We have strong reasons to believe that New Zealand producer prices increased in the third quarter because consumer prices soared. Therefore we feel the data can be traded proactively or reactively. For those who choose to wait, if PPI growth exceeds 1%, the NZD/USD can be bought for a move higher. If PPI growth is less than 0.5% the NZD/USD can be sold. PROACTIVE or REACTIVE TRADE


8400 caps upside
8300 near term support
Recovery may stall

The recovery in kiwi failed at the 8400 where it faces tough resistance and there is considerably more overhead. Meanwhile 8300 supports near term.

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