Profit Mongers Friday Trading Signal 08-27-2010

Hey folks,

EUR/USD's status is a bit indeterminate for me right now.  I see multiple possibilities and conflicting near term outlooks, so I'm choosing to refrain from any bold calls today.  I still plan to get short on EUR/USD long term when it seems like a corrective rally is topping, and that may even be the case now, but the picture just doesn't look particularly clear to me right now.

One reason the EUR/USD picture seems a bit muddy to me is the setup on the EUR/GBP.  Right now EUR/GBP seems poised for a nice 40-90 pip breakout higher, potentially leading to more of a substantial rally over the course of days or weeks.  Because of this, I'm going long here in the 0.8160 to 0.8210 range (now 0.8195) with a SL around 0.8120.  I plan to take partial profits around 0.8280 and final TP around 0.8600.

Stocks are still working downwards, but will likely find a short term low here in the 1030's.  I plan to personally just hold short through any corrective pattern, but as clear shorter term buy and sell points emerge, I'll let you know.  For now, 1070-1080 is the ideal selling range on S&P 500 futures, and while a buy in the 1030-1040 range may work out, I don't like the long side just yet.

In news Thursday, we saw US Jobless data come in a bit better than expected, but missing our triggers.  Still, USD/JPY managed a 25 pip rally and S&P500 futures managed a 5 point rally that held on for about 5 minutes.  Reassuring despite the missed trigger.  In news Friday:

0430 UK GDP q/q Revised (1.1% expected) - Unfortunately, this 2nd release of UK GDP has an annoying habit of rarely surprising economists.  Nevertheless, if it makes an exception today, we should see a good reaction on GBP.  Make sure the y/y number (1.6% expected) deviates in the same direction as well to confirm the trade.
If it comes out at 1.3% or higher, GBP/USD should rally 40 pips.
If it comes out at 0.9% or lower, GBP/USD should fall 40 pips.

0830 US GDP Annualized 2nd revision (1.4% expected) - Unfortunately, a modest trigger usually isn't enough to get things moving on the 2nd revision of GDP, so we'll have to look for a slightly larger trigger to ensure a move, especially since traders may be more focused on the speech 90 minutes later.
If it comes out at 2.0% or higher, USD/JPY should rally 35 pips.
If it comes out at 0.8% or lower, USD/JPY should fall 35 pips.

1000 Bernanke Speech at Jackson Hole (market wondering if there will be some new announcement) - The street is buzzing with anticipation for this speech to deliver some sort of new program, with some thinking a new phase of Quanitative Easing could be announced.  It's far from expected, but most pundits are still publicly pondering "what-if?"

--If some new expansionary announcement is made, that would be a big buy for EUR/USD for at least 40-50 pips and perhaps more based on the scope of the program.  Stocks should also mount a nice 1% rally or perhaps more over the course of 10-20 minutes.

--If the speech disappoints and nothing really new or shockingly dovish is said, the speculators will probably rush to cover their USD shorts and EUR/USD should have a nice short term selloff good for 40-50 pips.

To our success!
Sir Pipsalot

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