With sparse financial news from the U.S. this week, the currency markets may move on it.
Not all forecasts agree of course.
Lehman Brothers economists are looking for a 1% advance to a 5.05 million pace of sales in the month.
Economists from JPMorgan look for a second month of gains to put the pace at 5.01 million.
The existing home sales data is excluded from many other measures, so in many ways it is a pure information play.
The existing home sales index jumped 7.1% in the April report, which suggests existing sales could see a boost this month, yet they fell back 4.7% in May. The troublesome nature of this report contributes to the wide parameters of forecasts for Thursday's report, which range from from a low of 4.78 million units to a high of 5.10 million.
I believe the Fed already has seen the numbers and released the intent by having its spokesmen make unique and market pushing statements in recent days.
Crude has been falling. Amazing.
Who'd have guessed?
Supposedly crude oil inventories declined further than expected in the week ending July 18. Despite the decrease in inventories, crude dropped in price to $125.30 when the inventory data was released.
Gold has dropped precipitously, quickly falling $30 an ounce. That too gives additional strength to the dollar.
It is beginning to look like the Euro and other european currencies are beginning to sag versus the dollar. Since so many hedge funds have been simultaneously long crude AND the Euro, capital outflows could be severe.
As mentioned yesterday, we are currently long the Usd/Chf and Usd/Jpy FirstStrike “reverse” trades, the opposite trades of the initial entries. They are both still in progress.
- Usd/Chf: Long @ 1.0260, stop 1.0200.
- Usd/Jpy: Long @ 107.31, stop 106.71.
It would be nice if these trades continued profitable after the five straight losses taken on the initial trades.
The two trades I have have decent potential if the dollar just stays moderately stronger.
Current equity is $689.56.
See you tomorrow.
Joel Rensink
www.infiniteyield.com
PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!
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