Forex Trading: US Dollar Could Give Back Gains Today

After checking what is on the agenda for important news releases today, I noticed that it is a pretty busy day for the US dollar. Not only are there news releases for the dollar, but negative news for the Euro this morning didn’t mount any losses for the EUR/USD pair. These numbers include much lower consumer confidence, all of which can be found in this great overview written by European Commission for Ecomonic and Financial Affairs. I think it is no surprise that the European economic sentiment indicator fell sharply to it’s lowest level since 1993. But once again, these numbers did not greatly effect the Euro currency pairs

The GBP showed some nice numbers this morning that showed the UK’s Housing Price Index (HPI) was virtually unchanged from the last report and the rounup can be found here.

If you couple the fundamentals for the GBP and Euro with four economic indicator releases for the US, we could have the perfect storm. The major release is the first of the quarterly releases of the gross domestic product (GDP). Estimates are guessing this number will come in at -0.5%. But if you’ve watched the news lately and seen the actually numbers versus US fundamentals estimates, you know that this is an absolute crapshoot while the market is in this condition. I don’t see how the GDP can meet those numbers this time around.

So be careful trading around 8:30AM EST, because the US dollar pairs could be heading south. After the news, I like the GBP/USD to continue its stregth as shown below.

So be aware of the four news releases for the US dollar at 8:30 AM, and one more release at 10:35 AM. Good luck, and remember to check your spreads when trading around the news to make sure the cable hasn’t rocketed to 20 or 30 pips when getting in. Oh, and don’t be greedy, take your 25 pips and go have lunch!

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