TOP 5 HOT IDEAS

DATE: Monday Nov 11, 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 – Chinese Industrial Production

FUNDAMENTALS
Chinese Industrial Production expected @ 10% Exports (12:30 AM ET / 5:30 GMT on SATURDAY)
Our View – Neutral
Reason – Neutral
If IP grows by 10.5% or more = Buy AUD/USD
If IP grows by 9.5% or less = Sell AUD/USD

Chinese industrial production numbers are scheduled for release on Saturday, which means that it can only be traded reactively. However the data is important enough to have a meaningful impact on the AUD/USD when it opens for trading on Sunday. If industrial production grows by 10.5% or more, the AUD/USD can be bought for a move higher. If industrial production grows by 9.5% or less, the AUD/USD can be sold. REACTIVE TRADE

TECHNICALS

Downdraft continues
9400 broken
9300 next target of shorts

The Aussie correction continues with 9400 now given the pair targets 9300 while 9500 is now hard resistance.

2. NZD/USD – Credit Card Spending

FUNDAMENTALS
Credit Card Spending expected @ 1.3% (4:45PM ET / 21:45)
Our View – Neutral
Reason – Neutral
If Credit Card Spending rises by 1.8% or more = Buy NZD/USD
If Credit Card Spending falls by -0.5% or more = Sell NZD/USD

New Zealand credit card spending is not a huge market mover for the NZD/USD unless there is a big surprise so the data is best traded reactively. If credit card spending rises by 1.8% or more, the NZD/USD can be bought for a move higher. If credit card spending falls by -0.5% or more, the NZD/USD can be sold. REACTIVE TRADE

TECHNICALS

Coming into 8200 support
8400 caps
Break opens test of 8100

The kiwi followed Aussie lower and is now within striking distance of testing the 8200 support. A break there opens run to 8100.

3. USD/JPY – Eco Watchers Survey

FUNDAMENTALS
Eco Watchers Survey expected @ (0 AM ET / 5 GMT)
Our View – Neutral
Reason – Neutral
If Eco Watchers survey is 50 or lower = Buy USD/JPY
If Eco Watchers survey is 56 or better = Sell USD/JPY

Japan’s eco watchers survey is not a huge market mover for USD/JPY unless there is a big surprise. Therefore the data is best traded reactively. If the Eco Watchers survey drops to 50 or lower, USD/JPY can be sold for a quick move lower. If the Eco Watchers survey rises to 56 or better, USD/JPY can be bought. REACTIVE TRADE

TECHNICALS

Recovers 99.00
99.40 key to upside
98.00 support

USD/JPY recovered most of the losses from the day before recapturing the 99.00 level but the pair needs to retake the 99.40 highs as in order to make a run at the key 100.00 level.

4. USD/DKK – Denmark Trade Balance

FUNDAMENTALS
Trade Balance expected @ 8.0B (3 AM ET / 8 GMT)
Our View – Neutral
Reason – Neutral
If Trade Balance drops to 7.5B = Buy USD/DKK
If Trade Balance rises to 9.0B = Sell USD/DKK

Economic data from Denmark is difficult to handicap and therefore best traded reactively. If the trade balance drops to 7.5B, we expect USD/DKK to move higher. If the trade balance rises to 9.0B, we expect USD/DKK to move lower. REACTIVE TRADE

TECHNICALS

5.6000 flameout
5.5000 near term support
Lower high persist

USD/DKK has found stiff resistance at 5.6000 as the pair continues to make lower highs and the move could now return to towards support at 5.5000.

5. USD/MXN – Mexico Industrial Production

FUNDAMENTALS
Industrial Production expected @ -0.5% (9AM ET / 14GMT)
Our View – No Trade
Reason – No Trade
If Industrial Production falls by -0.9% or more = Buy USD/MXN
If Industrial Production is -0.2% or better = Sell USD/MXN

Mexico’s industrial production report is difficult to predict and therefore only tradable reactively. If industrial production falls by -0.9% or more, we expect USD/MXN to rise. If industrial production drops by -0.2% or better, we expect USD/MXN to rise. REACTIVE TRADE

TECHNICALS

13.3000 tops out
Triple top in making?
13.000 next support

USD/MXN may have reached a triple top at the 13.3000 level as the pair once again flames out at that resistance. 13.000 next support