Top 5 11.27.13


DATE: Wednesday, Nov 27, 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. EUR/CHF – UBS Consumption Indicator

UBS Consumption Indicator @ (2AM ET / 7GMT)
Our View – Neutral
Reason – Neutral
If UBS Consumption Indicator is less than 1.30 = Buy EUR/CHF
If UBS Consumption Indicator exceeds 1.70 = Sell EUR/CHF

Switzerland’s economic calendar is generally very light but there are a handful of releases worth watching and this includes the UBS Consumption indicator which is a measure of demand. Unfortunately the data is difficult to handicap and therefore best traded reactively and only if there is a meaningful surprise. If the index drops to 1.30 or lower, EUR/CHF can be bought for an extension higher. If it is rises to 1.70, EUR/CHF can be sold. REACTIVE TRADE


Back to 2300
Tight range reins
Lower highs

EUR/CHF continues to sit in a very tight 50 pip range but it is making lower highs which suggests that the pressure may be on o break the 2300 support level.

2. EUR/USD – GfK Consumer Confidence

GfK Consumer Confidence expected @ 7.1 (4AM ET / 9GMT)
Our View – Neutral
Reason – Neutral
If GfK exceeds 7.5 = Buy EUR/USD
If GfK is less than 6.5 = Sell EUR/USD

German consumer confidence numbers are difficult to handicap and not incredibly market moving for the euro unless there is a big surprise. As a result, we believe that the GfK survey should be traded reactively. If the GfK index exceeds 7.5, we expect the EUR/USD to rise. If the index falls to 6.5 or lower, we expect the EUR/USD to fall. REACTIVE TRADE


3550 retaken
3600 in view
3500 supports

EUR/USD remains well bid and the recovery of the 3550 level suggests that the pair may make a run at the 3600 level. Meanwhile 3500 provides near term support.

3. GBP/USD – UK GDP Final

GDP expected @ 0.8% (4:30 AM ET / 9:30 GMT)
Our View – Neutral
Reason – Neutral
If GDP is revised up to 1% = Buy GBP/USD
If GDP is revised down to 0.6% = Sell GBP/USD

No revisions are expected to the U.K.’s final GDP numbers. However if they happened to be revised, it should have a meaningful impact on the currency pair especially if the data is good. If GDP is revised up to 1% or higher, we expect the GBP/USD to rally. If GDP is revised down to 0.6% or lower, we expect GBP/USD to sell off. REACTIVE TRADE


6200 retaken
Test of swing highs
6100 supports

Cable had a strong day taking out the 6200 level as it recovered almost all of yesterday’s losses. The pair now eyes the yearly highs above the 1.6300 level.

4. USD/CAD – Average Weekly Earnings

Average Weekly Earnings expected @ (8:30 AM ET / 13:30 GMT)
Our View – Neutral
Reason – Neutral
If Average Weekly Earnings grows by less than 1% = Buy USD/CAD
If Average Weekly Earnings grows by 2% or more = Sell USD/CAD

Canada’s average weekly earnings report is not a huge market mover for the Canadian dollar unless there is a large surprise. So we feel that the only opportunity is to trade the data reactively. If earnings grow by less than 1%, USD/CAD can be bought for a move higher. If earnings growth exceeds 2%, USD/CAD can be sold. REACTIVE TRADE


1.0600 caps
1.0500 near term support
Topping formation

USD/CAD continues to traces out a topping formation at 1.0600 while 1.0500 holds support near term.

5. USD/JPY – Chicago PMI Index


Chicago PMI expected @ 60 (9:45 AM ET / 14:45 GMT)
Our View – Bearish USD
Reason – Weaker Empire and Philly Fed
If Chicago PMI exceeds 68 = Buy USD/JPY
If Chicago PMI is less than 60 = Sell USD/JPY

The Chicago PMI report is scheduled for release and given the drop in the Empire State and Philly Fed surveys, we expect a weaker release. As such we feel that this data should be traded proactively or reactively. If the Chicago PMI index exceeds 68, USD/JPY can be bought for a move higher. If the index drops to 60 or lower, USD/JPY can be sold. PROACTIVE or REACTIVE TRADE


102.00 flameout
101.00 possible test
100.00 deep support

USD/JPY has failed at the 102.00 level for the second day in a row and is now correcting towards the 101.00 level. Meanwhile 100.00 offers deep support.

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