Top 5 – 06.12.2103

*Top 5 Archive Members Only Top 5


DATE: Wednesday June 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 – Consumer Confidence

AU Consumer Confidence expected @ (8:30 PM ET / 00:30 GMT)
Our View – Neutral
Reason – Neutral
If Consumer Confidence rises by 1% or more = Buy AUD/USD
If Consumer Confidence drops by -8% or more = Sell AUD/USD

Australian consumer confidence numbers are scheduled for release this evening. Most of Australia’s recent economic reports have been mixed, making this month’s release difficult to handicap and best traded reactively. If consumer confidence rises by 1% or more, it would be enough to drive a stronger recovery in the AUD/USD. If it drops by 8% or more, the AUD/USD can be sold. REACTIVE TRADE


9300 may be near term bottom
Gap needs to be closed
9500 need to be recovered to establish a bottom

Aussie may have finally washed out near the 9300 level, but the pair needs to retake the 9500 figure and fill the gap from Sunday in order to establish a viable bottom.

2. GBP/USD – UK Employment Jobless Claims

Jobless Claims Change expected @ -5K (4:30 AM ET / 8:30 GMT)
Our View – Bullish GBP
Reason – Stronger Employment According to PMIs
If Jobless Claims Drop by 10K or more = Buy GBP/USD
If Jobless Claims Drop by 2K or less = Sell GBP/USD

We have strong reasons to believe that U.K. labor market conditions improved last month because the service sector saw its strongest job growth in 3 months while the manufacturing sector enjoyed its first month of job growth in four according to the PMIs. As a result, we believe that UK Employment numbers can be traded proactively or reactively. For those who choose to wait, if jobless claims drop by 10K or more, the GBP/USD can be bought for a continued move higher. If claims drop by 2K or less, the GBP/USD can be sold. PROACTIVE or REACTIVE TRADE


5700 in view
5500 still strong support
Break of 5700 opens run to 5850

Cable remains in a bullish posture with 5700 now in view for longs as the pair continues to inch higher. 5500 remains key support while a break of 5700 opens upa run to 5850

3. EUR/USD – Eurozone Industrial Production

EZ Industrial Production expected @ 0% (5 AM ET / 9 GMT)
Our View – Bullish EUR
Reason – Strong Rise in GE and FR IP
If IP rises by 1.5% or more = Buy EUR/USD
If IP drops by -0.5% or more = Sell EUR/USD

We have strong reasons to believe that Eurozone Industrial Production will surprise to the upside. When we look to handicap EZ data, we always turn to the releases of its 2 largest economies – Germany and France. Both countries reported an increase in April. As a result, the data can be traded proactively or reactively. If industrial production rises by 1.5% or more, the EUR/USD can be bought for a move higher. If industrial production drops by 0.5% or more, the EUR/USD can be sold. PROACTIVE or REACTIVE TRADE


3310 still contains
Break of 3350 opens up 3400
3200 new support

EURUSD continues to perform well but the 3310 level still contains the upside for now. A break of 3350 opens up a run to 3400-3500 region while 3200 is new support for the pair.

4. USD/CAD – House Price Index

House Price Index expected @ 0.1% (9 AM ET / 13 GMT)
Our View – Neutral
Reason – Neutral
If House Price index drops -0.3% = Buy USD/CAD
If House Price Index exceeds 0.5% = Sell USD/CAD

Canada’s house price index is not a huge market mover unless there is a big surprise. Therefore the data can only be traded reactively. If house prices drop by 0.3% or more, USD/CAD can be bought. If the House Price Index exceeds 0.5%, USD/CAD can be sold. REACTIVE TRADE


Downward bias remains
1.0150-1.0100 very stiff support
1.0250 caps upside for now

USDCAD remains in a downward bias but the pair is coming in against very stiff bids at 1.0100-1.0150 level while 1.0250 caps the upside.

5. NZD/USD – RBNZ Rate Decision

RBNZ Rate Decision expected @ 2.5% (5 PM ET / 22 GMT)
Our View – Neutral
Reason – Neutral
If RBNZ stays mum on the currency = Buy NZD/USD
If RBNZ warns about further intervention = Sell NZD/USD

The Reserve Bank is not expected to change interest rates but their comments about the New Zealand dollar could have a significant impact on the currency. When we last heard from the central bank, the RBNZ expressed their concerns about the NZD, which had risen to a 4 year high against the AUD. There’s been very relief since then and so there is a very good chance they will harden their warning about intervention, which could extend the slide in the NZD/USD. If they say nothing about the currency, the NZD/USD can soar in relief. REACTIVE TRADE


7800 spike bottom?
8000 major resistance
7800 new support

The kiwi may have set a spike bottom at the 7800 level but would need to clear 8000 in order to remove the downward bias. A retest of 7800 may still be in view.