Top 5 11.25.13

TOP 5 HOT IDEAS

DATE: Monday, Nov 25, 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. USD/SGD – Singapore CPI



FUNDAMENTALS
CPI expected @ 0.3% (12 AM ET / 5 GMT)
Our View – Neutral
Reason – Neutral
If CPI growth is 0.1% or less = Buy USD/SGD
If CPI growth exceeds 0.5% = Sell USD/SGD

Singapore’s consumer price report is due for release on Monday and the data is best traded reactively. Inflationary pressures are expected to increase and if economists are right and CPI rises by 0.5% or more, we expect USD/SGD to sell-off. If CPI growth is less than 0.1%, we expect USD/SGD to rise. REACTIVE TRADE

TECHNICALS

2550 caps
Possible triple top
2450 support

USD/SGD is running out of upside momentum as it continues to channel in the 2450-2550 zone.

2. GBP/USD – BBA Loans for House Purchases

FUNDAMENTALS
BBA Loans expected @ 45000 (4:30 AM ET / 9:30 GMT)
Our View – Neutral
Reason -- Neutral
If BBA Loans rise by 48000 or more = Buy GBP/USD
If BBA Loans rise by 40000 or less = Sell GBP/USD

The British Bankers Association is set to release its monthly report on House Purchases but the report is not a huge market mover unless there is a big surprise. Low interest rates have been extremely supportive of the U.K. housing market but we feel that it is best traded reactively. If BBA loans rise by 48000 or more, we expect the GBP/USD to rally. If loans rise by 40000 or less, we expect the GBP/USD to weaken. REACTIVE TRADE

TECHNICALS

6200 taken out
Run on yearly highs
6300 key to upside

Cable continues to perform well as its inching its way towards a test of yearly highs. 6300 is key to the upside which if taken can lead to a breakout towards 1.6500.

3. USD/TRL – Turkish Industrial Confidence

FUNDAMENTALS
Industrial Production expected @ (7:30 AM ET / 12:30 GMT)
Our View – Neutral
Reason – Neutral
If Industrial Confidence drops below 105 = Buy USD/TRL
If Industrial Confidence rises above 109 = Sell USD/TRL

Industrial confidence numbers are scheduled for release from Turkey on Monday. Unfortunately the data is difficult to handicap and not incredibly market moving unless there is a big surprise. Therefore we feel that it is best traded reactively. If industrial confidence drops below 105, we expect USD/TRL to rise. If industrial confidence exceeds 109, we expect USD/TRL to fall. REACTIVE TRADE

TECHNICALS

Testing 2.0000 support
2.0500 caps upside
Lower highs suggest bearish bias

Lower highs suggest bearish bias in USD/TRY as the pair moves towards a test of 2.0000 support. Meanwhile 2.0500 caps the upside.

4. USD/MXN – Mexico Unemployment Rate

FUNDAMENTALS
Unemployment Rate expected @ 5.15% (9 AM ET / 14 GMT)
Our View – Neutral
Reason – Neutral
If Unemployment rate exceeds 5.5% = Buy USD/MXN
If Unemployment rate is less than 5% = Sell USD/MXN

Labor market numbers are important for every country and Mexico is no exception. While the data is difficult to handicap, if there is a good enough surprise, we expect a meaningful reaction in USD/MXN. The opportunity here is to trade the data reactively. If the unemployment rate exceeds 5.5%, we expect USD/MXN to rise. If the unemployment rate is less than 5%, we expect USD/MXN to fall. REACTIVE TRADE

TECHNICALS

13.1000 near term high
12.8000 support
Bias slightly bearish

Lower highs suggest bearish bias in USD/MXN as well as the pair moves towards a test of 12.8000 support as 13.1000 caps the upside for now.

5. USD/JPY – Pending Home Sales

FUNDAMENTALS
Pending Home Sales expected @ 1.1% (10 AM ET / 15 GMT)
Our View – Bearish USD
Reason – Lower Existing Home Sales, Fed Concerns About Housing
If Pending Home Sales grow by 4% or more = Buy USD/JPY
If Pending Home sales drop by 2% or more = Sell USD/JPY

Pending home sales are scheduled for release on Monday and based on the decline in existing home sales along with the Federal Reserve’s concerns about housing, we feel the data could surprise to the downside. Pending home sales can be traded proactively or reactively. If Pending home sales grow by 4% or more, USD/JPY can be bought for a move higher. If Pending home sales drop by 2% or more, USD/JPY can be sold. PROACTIVE or REACTIVE TRADE

TECHNICALS

101.50 resistance remains
101.00 near term support
Break opens run to yearly highs

USD/JPY remains very well bid, but 101.50 still represents the final resistance point before the pair can make an assault on the yearly highs near the 103.50 level. 101. is near term support.

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