Profit Mongers @ 6:58 AM, Thursday January 05 2012
0815 US ADP Employment (178k expected, 206k prior, +125k to +230k range) 150-200 most
A decent sized deviation last month which just hit our trigger and caused a move up accross risk-assets
with CADJPY rallying 40 pips in 4 minutes, pulling back 61% of that and making another move up for a total
of about +70-75 pips over the following 2-3 hours. The previous month's figure was also revised up +20 and
there were similar moves in other yen crosses and even the USDJPY made +25 pips. Even USD crosses rallied
on the news but the initial spikes were a bit more whippy, but eventually GBPUSD, EURUSD, AUDUSD & NZDUSD
resolved higher on risk appetite fueling a US Dollar sell-off...despite positive US news. USDCAD dropped
with loonie strength. +/-70k is where we have been setting our triggers which might be wide for some but
in the past +/-50k was enough be there were some unreliable price reactions to deviations in that area. This
one occasionally will do a mammoth +/-150k deviation like in June 2011 or even closer to +/-200k as seen last
year in January, and there have been some excellent moves. Occasionally like in October 2011 a smaller +/-15k
deviation will lead to a good move but this is not reliable and consistent enough, unless you have quick
execution and can manage your risk well enough to try and catch the ride if it wants to go somewhere can get
off in time if it doesn't.
If it comes out at +248k or higher, USD/JPY should rally 40 pips.
If it comes out at +108k or lower, USD/JPY should drop 40 pips.
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