Mr Forex: Wednesday, June 06, 2007

Wednesday, June 6, 2007

Trade Friday's NFP Report With The EURUSD

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Trade Friday's NFP Report With The EURUSD
Thursday, 31 May 2007 15:01:18 GMT
Printer Friendly | Email Article | RSS | Previous articles
Previous Articles

* Jun 06 - EURUSD - Trade of Record Low Volatility by Hedging
* Jun 06 - EUR/USD - Ready to Rally Through 1.3680
* Jun 05 - Euro and ECB Rate Outlook Hinge on Trichet's Commentary
* Jun 05 - Chinese Stock Markets Collapse: Watch out for Moves in the Dow, Carry and Chinese Yuan
* Jun 04 - Dollar - Going Nowhere Fast?
* Jun 01 - USD/CHF - The Pair to Short-Term Range Trade
* Jun 01 - EUR/GBP - Hedging Strategy of the Week
* Jun 01 - We Answered Your Questions!
* May 31 - Trade Friday's NFP Report With The EURUSD
* May 31 - USDCAD - Sentiment Index Calls for More CAD Strength. Is Parity Possible?
* May 30 - Chinese Stock Markets Collapse, Dow Moves Limited: Chances for a Yuan Free Float Increases
* May 30 - Has USD/CAD Reached A Bottom?
* May 29 - Euro Strength Will Hinge On Whether The ECB Signals More Hikes Next Week
* May 29 - DailyFX Dynamic Carry Trade Basket: Gains in NZD, AUD and GBP positions offset by losses in CHF and HKD
* May 28 - Dollar Grinds Higher- Does it Have More Left?
* May 25 - AUD/NZD - The Pair to Short-Term Range Trade
* May 24 - EURUSD Retail Traders Have Been Short Euros For the Past Seven Months
* May 23 - AUD/USD - Continuing Lower Towards .8130
* May 23 - EUR/USD - Hedging Strategy For 100 pips in Potential Profit
* May 22 - China Invests In Blackstone Group - Is It Only The Beginning?

Written by David Rodriguez, Currency Analyst

Trading the News: US Non-Farm Payrolls

What is Expected
Time of release: 06/01/2007 12:30 GMT, 08:30 EST
Primary Pair Impact : EUR/USD
Expected: 140K
Previous: 88K

TTN2007.05.31.img1

TTN2007.05.31.img2

How To Trade This?

The US Non-Farm Payrolls report is one of the most market-moving economic releases on the calendar, promising volatility regardless of the outcome. Last month’s report proved to be marginally dollar-bearish, but overall Greenback resilience forced the EURUSD lower through subsequent weeks of trading. Increasingly narrowed focus on overall US employment growth leaves dollar bulls hoping that NFP’s will surprise to the topside. Yet an improvement in NFP’s is far from a foregone conclusion; disappointments in this week’s ADP Employment Change and similar jobs data may leave risks to the downside ahead of the report.

Given expectations of a strong NFP gain, the dollar may have difficulty rallying in the absence of a notable surprise to the topside. A strong May print and an unchanged or upwardly revised April figure would clearly be the most Greenback-bullish outcome, providing a signal to go short the EURUSD on confirmation of a bearish reaction at 08:35 EST (12:35 GMT). Stops should be set above preceding swing-highs, while profit taking will be at the trader’s discretion. If the initial 5-minute move is especially pronounced, it may be difficult to achieve a 1:1 stop-loss to profit target ratio on this trade. This makes it that much more important to watch for signs of imminent reversal through the following hours of trade.

Bullish predictions for the coming NFP report leave ample room for disappointment with risks weighed to the downside for the US dollar. A below-consensus April print and an unchanged or downwardly revised March number would be the most dollar-bearish scenario, providing a clear signal to go long the EURUSD on confirmation of a rally at 08:35 EST (12:35 GMT). Stop limits shall be set at preceding swing lows, while profit targets will remain at the trader’s discretion. If the initial move is particularly pronounced, it may be difficult to achieve a 1:1 stop-loss to profit-target ratio—reinforcing the importance of monitoring the trade.

TTN2007.05.31.img3
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EUR/USD - Ready to Rally Through 1.3680

Wednesday, 06 June 2007 18:50:13 GMT

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Written by Jamie Saettele, Technical Currency Strategist

**The Top/Bottom strategy is published every Wednesday on dailyfx.com. Updates and additional ideas are published everyday on FXCMTR, available to FXCM clients.

The advance from 1.1640 is either in the final stages of an extended 5th wave (from 1.2482) or has completed an a-b-c-X-a-b-c (labeled W-X-Y) correction at 1.3680. The reason that we favor the former interpretation is due to the 3 wave setback from 1.3680 to 1.3392. As long as 1.3392 remains intact, it is our view that the EURUSD will work higher (in a 5th of a 5th) to test trendline resistance just above 1.3680. We are confident enough in the pattern to get bullish now, against 1.3449 (just below the 61.8% of 1.3392-1.3552 at 1.3453), targeting 1.3680 (since we expect a reversal following a new high, we do not want to push our luck). Move to breakeven on a rally through 1.3552.

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Trade of Record Low Volatility by Hedging

Daily FX

* Wednesday, 06 June 2007
* About FXCM |
* Contact Us |
* Currency Converter

* News
* Economic Events Calendar
* Currency Charts
* Currency Rooms
* DailyFX Forum

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* Open an FXCM Account
* Deposit Funds
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EURUSD - Trade of Record Low Volatility by Hedging
Wednesday, 06 June 2007 19:53:51 GMT
Printer Friendly | Email Article | RSS | Previous articles
Previous Articles

* Jun 06 - EURUSD - Trade of Record Low Volatility by Hedging
* Jun 06 - EUR/USD - Ready to Rally Through 1.3680
* Jun 05 - Euro and ECB Rate Outlook Hinge on Trichet's Commentary
* Jun 05 - Chinese Stock Markets Collapse: Watch out for Moves in the Dow, Carry and Chinese Yuan
* Jun 04 - Dollar - Going Nowhere Fast?
* Jun 01 - USD/CHF - The Pair to Short-Term Range Trade
* Jun 01 - EUR/GBP - Hedging Strategy of the Week
* Jun 01 - We Answered Your Questions!
* May 31 - Trade Friday's NFP Report With The EURUSD
* May 31 - USDCAD - Sentiment Index Calls for More CAD Strength. Is Parity Possible?
* May 30 - Chinese Stock Markets Collapse, Dow Moves Limited: Chances for a Yuan Free Float Increases
* May 30 - Has USD/CAD Reached A Bottom?
* May 29 - Euro Strength Will Hinge On Whether The ECB Signals More Hikes Next Week
* May 29 - DailyFX Dynamic Carry Trade Basket: Gains in NZD, AUD and GBP positions offset by losses in CHF and HKD
* May 28 - Dollar Grinds Higher- Does it Have More Left?
* May 25 - AUD/NZD - The Pair to Short-Term Range Trade
* May 24 - EURUSD Retail Traders Have Been Short Euros For the Past Seven Months
* May 23 - AUD/USD - Continuing Lower Towards .8130
* May 23 - EUR/USD - Hedging Strategy For 100 pips in Potential Profit
* May 22 - China Invests In Blackstone Group - Is It Only The Beginning?

Written by Antonio Sousa, Currency Analyst

§ Currency Pair: EUR/USD

§ Entry Zone: Go both long and short at the market if the price is at any level within the 1.3450-1.3550 range

§ Protective Stop: Long stop below 1.3390 and short stop above 1.3610

§ Profit Target: Long Target at 1.3550 and Short Target at 1.3450

§ Profit Potential: 100 pips (excluding transaction costs and slippage)

The most effective way to capitalize on currencies pairs that are trapped in tight ranges is through the use of hedging. The hedging feature is currently available on all accounts using FXCM’s No Dealing Desk service. For more information on FXCM hedging strategies please visit http://www.fxcm.com/hedging.jsp

hedging_June6

The EUR/USD is our primary target for hedging in the week ahead, with clear range-bound trade and concrete support and resistance levels. To hedge, go both long and short at the market if price stays within the above Hedging Zone. Take profits at R1 for longs and at S1 for shorts, covering losses above R2 or below S2.

More Low Risk Hedging Opportunities - Currencies that are Ranging

Currency

% ATR Rank

Stop for Long

Hedging Zone

Stop for Short

Profit Range

EURCHF

|||||| 0.34%

1.6320

1.6413

1.6533

1.6613

120 pips

EURGBP

||||||||| 0.44%

0.6668

0.6750

0.6870

0.6961

120 pips

GBPCHF

|||||||||||| 0.49%

2.4050

2.4175

2.4309

2.4437

134 pips

EURUSD

|||||||||||| 0.50%

1.3390

1.3450

1.3550

1.3610

100 pips

GBPUSD

||||||||||||| 0.55%

1.9589

1.9822

1.9997

2.0135

175 pips

Medium Risk Hedging Opportunities - Currencies that are Volatile

Currency

% ATR Rank

Stop for Long

Hedging Zone

Stop for Short

Profit Range

EURAUD

|||||||||||| 0.65%

1.5595

1.6000

1.6200

1.6476

200 pips

USDCAD

||||||||||||| 0.66%

1.0450

1.0550

1.0640

1.0740

90 pips

AUDUSD

||||||||||||| 0.70%

0.8068

0.8168

0.8357

0.8457

189 pips

CHFJPY

||||||||||||| 0.71%

97.82

98.82

99.78

100.78

96 pips

USDCHF

||||||||||||| 0.72%

1.2075

1.2150

1.2238

1.2354

88 pips

High Risk Hedging Opportunities - Currencies that are Trending

Currency

% ATR Rank

Stop for Long

Hedging Zone

Stop for Short

Profit Range

EURJPY

|||||||||||||| 0.75%

159.61

162.40

164.00

165.00

160 pips

USDJPY

||||||||||||||| 0.77%

119.53

120.53

122.13

123.13

160 pips

GBPJPY

||||||||||||||||| 0.88%

238.50

240.00

241.50

243.00

150 pips

AUDJPY

|||||||||||||||||| 0.91%

99.00

100.00

102.50

103.50

250 pips

NZDUSD

||||||||||||||||||| 0.97%

0.7150

0.7403

0.7550

0.7650

147 pips

NZDJPY

||||||||||||||||||||| 1.22%

87.00

89.01

91.00

93.00

199 pips

Rules for the Hedging Radar

1) Entry Zone -> Go both long and short at the market if the currency is at any level within the Hedging Zone.

2) Profit Taking ->Target for the long order is the top of the entry zone, for the short order is the bottom of the entry zone.

3) Stop Levels are Key Support and Resistance Points -> Place the actual stops a few pips above the higher level and a few pips below the lower level. The break of these levels signals that the ranges have been broken and the hedging strategy should no longer be implemented.

4) The lower the Average True Range, the Less Risky the Currency is for Hedging.

**How is the % ATR Rank Calculated?

The average true range is the 90 days moving average of the currency’s true range. The true range is the greatest of: the difference between the current high and the current low; the difference between the current high and the previous close or the difference between the current low and the previous close.

The %ATR is the relative value of the ATR when weighted against the price. For example, if the ATR for the EURGBP is 26 pips then the %ATR is 0.4 percent since 0.0026/0.6602 = 0.4% where 0.6602 is the quoted price of the EURGBP.

For more information on FXCM hedging strategies please visit http://www.fxcm.com/hedging.jsp

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