http://www.yummyapple.com/03-07-2008.html

Let's first review what happened earlier today.

First, we had UK Services PMI which deviated greatly by 2. It was a good deviation (ignore what was said on video) and it did hit our trigger. GBP/USD moved about 130 pips in 2.5 hour, or 70 pips in a first few minutes. It was hard, if possible at all, to enter manually as the price moved so quickly; lucky SNW users, however, managed to bank a nice amount of pips.

Then we had ADP Employment Change which did not hit our trigger so it was a no trade. However, we saw a pretty good price action, 33 pips move on USD/JPY - just for your information.

At 10 a.m. we had U.S. ISM Non-Manufacturing coming out. It came out about 2.0 above expectations but I gave 3.0 trigger on this so it was a no trade. The market just overreacted because the number came out at 49.3 which a contraction of the market (still below 50). As you know, however, the market is always right. USD/JPY almost instantly moved up by 30 pips to make 67 pips in the first 20 minutes. Last week we had good deviations on some indicators but the market was not moving. This week the market is overreacting at all.

Tomorrow we are going to have a few things.

1. Thursday, March 6th, 2008 (7:00 a.m. New York Time) UK
At 7:00 a.m. we will have UK Interest Rate coming out. It is expected they will keep the rates unchanged this month and maybe cut rates next month or two months later. Actually, there is one economist that thinks they will cut the rates tomorrow but vast majority expects them to hold the rates at current level. If they do cut rates, it will be a great opportunity to sell GBP/USD, looking for 70 pips or more in the first hour of the report.

2. Thursday, March 6th, 2008 (7:45 a.m. New York Time) EURO ZONE
At 7:45 a.m. we will have Interest Rate Announcement out of Euro zone. It is expected they will hold the rates steady at 4.00%. If they move the rates either direction, it will be worthy to take a trade. If they cut the rates to 3.75 (or less), it would be worthy to sell EUR/USD and expect 70 pips move or more in the first hour of the report. If they hike rates to 4.25 (or more), it would be a good opportunity to buy EUR/USD and also expect 70 pips move or more in the first hour of the report.

3a. Thursday, March 6th, 2008 (8:30 a.m. New York Time) CANADA
At 8:30 a.m. we will have a few things coming out at the same time. First one is Canadian Building Permits. You can use 5% trigger here. If it comes out at 6.0% or higher, then it would be a sell signal on USD/CAD, looking for about 35 pips of move in the first hour of the report. If it comes out at -4.0% or more negative, it would be worth to buy USD/CAD, looking for 35 pips or more in the first hour of the report.

3b. Thursday, March 6th, 2008 (8:30 a.m. New York Time) USA
Also at 8:30 a.m. we will have U.S. Initial Jobless claims coming out which is coming out right before the Non-Farm Payroll that is coming out on Friday so we may get another overreacting situation. It is expected to come out at 360K. If it comes out at 370K or higher than that, it would be worthy to sell USD/JPY. If it comes out at 345 K or lower, it would be a buy signal on USD/JPY. I would expect solid 35 to 40 pips price action on this report.

4. Thursday, March 6th, 2008 (8:35 a.m. New York Time) EURO ZONE
After 8:30 a.m., probably around 8:40 a.m. Trichet will be speaking, giving clues about future interest rate policy. Right now they are pretty much neutral. Any hits towards cutting or hiking will result moves on the Euro but I would not try to trade this speech unless you are really very experienced and you can interpret what he is saying by yourself.

5a. Thursday, March 6th, 2008 (10:00 a.m. New York Time) USA
At 10:00 a.m. U.S. Pending Home Sales. I would ignore that as it is the weakest housing indicator, and the other housing indicators were not performing too well.

5b. Thursday, March 6th, 2008 (10:00 a.m. New York Time) CANADA
At 10:00 a.m. we will also have Canadian Ivey PMI. I would trade it with approx. 5 trigger. If it comes out at 60 or higher, that would be a sell signal on USD/CAD, looking for about 25 to 30 pips of a price action. If it comes out at 50 or lower, it would be worthy to buy USD/CAD and look for 25 to 30 pips of a price action.

That's all for tomorrow. Another busy day. As always, you can watch more detailed signal by clicking on the video link (ignore comments about the UK trade).

Thank you and good luck with your trades.

To Our Success!
-Sir Pipsalot