September 21st, 2006 (8:30 am New York Time) CANADA

We have Canadian Retail Sales coming out of Canada.  We will have two numbers, the headline number and the X autos number.  X autos number is considered the core number, and is generally more important than the headline number.  That will be my focus. 

The consensus on this number varies from 0.3% to 0.6%.  If the number comes out at -0.1% or more negative, that's bad for the Canadian dollar, so I will go long on USD/CAD.  If the number comes out at 1.0% or higher, that's good for the Canadian dollar, so I will go short on USD/CAD.  Just watch out for one thing.  If the headline number is conflicting to the core number, it may cause a spike in the opposite direction.  However, the core number, if it hits the signal, should have more weight, so just wait a few minutes, and you should see the currency going towards the core number.

September 20th, 2006 (4:30 am New York Time) UK

The Bank of England minutes come out today. They may be talking about possibly raising interest rates one more time next month or the following month.  If that's the case, that should be good for GBP/USD.  If for some reason they talk about not raising the rate, or show some uncertainty about it, GBP/USD will probably have a short term down move, because talks about another rate hike is expected, and any hesitancy about it, will probably be bad for GBP/USD.

If you have no news service, you can look at a small interval chart at 4:30 am New York Time, and if you see some noticeable strength or weakness in the pound, you can jump in.  I am personally planning to go long before the report, unless something unexpected changes close to it, and if I go long, I will be reading the minutes on my Reuters and Bloomberg news platforms, and will either hold position or reverse it in case of no rate hike announcement or hesitancy.  If this trade happen, the move should be at least 50 pips.

September 20th, 2006 (2:15 pm New York Time) USA

The U.S. interest rate announcement is due. This will probably be a dog...meaning not tradable.  I am 99% sure that they'll probably leave the rate unchanged, and won't say anything.  However, if for some weird reason they hike the rate, then I will go short on GBP/USD or EUR/USD, and will be looking for at least 100 pips move down. 

Or if for some reason during the announcement they mention another possible rate hike, that should again be good for the dollar for perhaps at least 50 to 100 pips, so dollar should strengthen against everything else.  If they mention something that there is going to be no more rate hikes this year or something like that, we should see some weakness in the dollar, not as much, maybe 30 to 50 pips on the EUR/USD or GBP/USD, depending where the price is at before the announcement.  However again, the chances of anything mentioned above happening are slim to none.  Most likely, they'll just announce a no rate hike as everyone is expecting, won't say anything, and the market won't care much.

September 20th, 2006 Update

On the BOE minutes, we saw that in September there was 8:0 vote on no rate hike.  That what was kind of expected, and it confirmed that interest rate hike in England would be later rather than sooner.  That was supposed to have short term weakening effect on GBP/USD pair, and it did, we saw the pound spike down on this report. 

Then during the FOMC announcement, U.S. kept the interest rate unchanged, however they mentioned that inflation is still strong.  One of the ways to fight inflation is to raise interest rates, that indirectly meant that possibly U.S. may be thinking of another rate hike, which brought GBP/USD down by over 40 points. 

That's the tricky part about some of these news reports, when the report comes out against the most recent trend, which on the pound was up, many times the low price generated by the report is simply an opportunity for bulls to get in at better price on the trend.