Trades for week of May 27 thru June 1

We will have an interesting situation on Friday where we have 2 different trades at the same time. This might be a first for many of you. Monday (tomorrow) is a bank holiday for the US and Europe, so keep that in mind.

Tue 5/29 9:30 PM – AUD Retail Sales m/m
Thu 5/31 8:30 AM – US Prelim GDP q/q
Fri 6/1 4:28 AM – UK Manufacturing PMI
 Fri 6/1 8:30 AM – US Non-farm Payroll
Fri 6/1 8:30 AM – CAD GDP m/m

The AUD trade and the US NFP provide the best opportunities this week.

UK Retail Sales

GBP/USD

Couple things to be aware of here. Number one is that the deviations have been huge in each of the last 3 months. If we get good deviations with both rows in agreement as well as revisions, we should see a decent move like in the past. But if row 2 comes out in the opposite direction, we might get a quick reversal. Not sure because it hasn’t happened in awhile. The other thing is that the MPC Meeting Minutes will be released at the same time, and is not visible to the STPro (because it is a series of numbers and doesn’t represent a deviation). These will most likely come out as expected and not have any bearing on our trade, but if they don’t we could see some odd behaviors that don’t make any sense. So … given these risks, trade accordingly.

Trades for week of May 20 thru 25, 2012

This week offers up slightly more opportunity than last week did, though that is not saying much since the bar was set so low last week.

This is the list:

Tue 5/22 4:30 AM – UK CPI                         
Wed 5/23 4:30 AM – UK Retail Sales
Wed 5/23 8:30 AM – CAD Core Retail Sales
Thu 5/24 4:30 AM – UK Revised GDP q/q

Lot of UK action this week. The only one I am likely to trade is the Retail Sales trade. The only UK GDP that tends to be a big mover is the Preliminary GDP and that won’t happen again till July. And I think we are still a ways off from the CPI trades starting to matter. I will post for these but don’t expect much and trade conservatively. The CAD Retail Sales really hasn’t done much lately either. The big opportunity of the week is the UK Retail Sales.

CAD Employment Change

Tradable on = USDCAD or EURCAD     

News Name
CAD Employment MM - Change in the number of employed people during the previous month.

General
Recently this trade has provided a lot of pips!!! However it has some danger areas!

In February we saw -19 and .1 with a 17 pip spike and full retracement in a couple minutes. In March we saw -17.8 and -.2 with a 9 pip spike followed by a hard 19 pip push in the opposite direction. This was due to row 2 coming out in opposition to row 1. This is something to keep a close eye on. In April we saw an enormous deviation of 71.8 and -.2 with a nice 48 pip spike on the EUR/CAD. Retraced a bit and continued down into the 60 pip neighborhood where it stayed for 20 minutes. Should have moved farther but a good move nonetheless.
I would not expect a deviation quite that large again this month but it is not unusual to see good deviations on this trade. Like always, and particularly if you are planning to trade higher lots than normal, be highly alert to pre-news movement and be ready to click out if you see anything suspicious. Be safe, not sorry.

Australian Employment Change

9:30 PM EDT

AUD Employment Change – Change in the number of employed people for the previous month
AUD/USD

In February this came out at 36.3 and -.2 with a 25 pip spike, very small retracement, and continuation another 10 pips or so. Row 1 came out 3 seconds after the posted time causing the initial spike and row 2 came out 6 seconds after (3 seconds later) causing the additional push. Nice trade. In March it came out at -20.4 and 0 with a 23 pip spike followed by a slow return to breakeven in 6 or 7 minutes. In April we saw 37.5 and -.1 with a 55 pip spike. Very nice trade.
This thing seems to move 20+ pips no matter what the deviation is, but it looks like if we see a deviation in excess of 30 we tend to have a real nice protracted move. Whether you decide to increase your trade size or not, we all must be vigilant for pre-news spikes.

Things to watch

There are 3 elements to this trade……….
1) Employment Change
2) Unemployment Rate (remember a positive figure is BAD, and a negative figure is GOOD)
3) The spilt between Full and Part Time… we don’t care much about the “part time” figures…but we do want to see the full time figures deviate in the same direction.
If the trade triggers and all three deviate in the same direction, then you should be on for a great trade, and you can expect alot of “continuation“.
If however any lines conflict, then “continuation” may be hard to come by, and its best to close your trade on the first sign of any retrace.

US Non-Farm Payroll

8:30 AM EDT                                   
US Non-Farm Payroll – Change in the number of employed people for the last month, excluding the farming industry.
EUR/JPY
In February we saw deviations of 103 and -.2 with a 38 pip spike, small retracement, and continuation to 45 pips in 2 minutes before falling all the way back. In March we saw -17 and 0 with a 20 pip spike, small retracement, and continuation to 35 in 2 minutes before falling all the way back in 4 minutes. In April we saw -85 and -.1 with a 65 pip spike, 25% retracement, and continuation to 100+ pips in 12 minutes.
This is turning into a right good trade, particularly when we get good deviations.