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Let's first review past Friday.

On Friday we had Swiss CPI. It did hit our trigger. The pre-release price on USD/CHF was 1.1128, and it traded down to as low as 1.1100 so only about 28 pips. I was expecting more especially with a very large downtrend we have been seeing all week. Unfortunately, that's all what we had. GBP/CHF traded from 2.1937 down to 2.1846 so GBP/CHF had 90 pips price action; however, it was still completely reversed.

Then we had UK Services PMI. We just missed our buy trigger. The price moved 85 pips so I wonder how many pips it would move if it did hit our trigger. GBP/JPY moved about 130 pips. If you took it because it was close to my trigger, you probably made a good money but the fact is it did not hit the trigger so it was a no trade.

Then we had the CPI out of Euro Zone. It came out exactly as it was expected so it was a no trade.

At 8:30 we had the U.S. Non-Farm Payroll. It came out at 18K so it did hit our buy signal on GBP/USD. Moreover, the unemployment rate came out at 5.00% with 0.2 deviation which was also pointing towards dollar weakness. They should weaken the dollar very well towards buy GBP/USD or sell USD/JPY. USD/JPY moved 100 pips in a few minutes, and it retraced back. The GBP/USD did not move up that much as it moved about 85 pips but EUR/USD moved a lot better.

Then we had ISM Non-Manufacturing, and it came out very close to expectations so it was a no trade. However, the Canadian Ivey PMI did hit our trigger. This one incredibly overreacted. It moved so quick so I did not get in, and it just kept going from 0.9922 to 1.0090. It was a lot of opportunity to buy USD/CAD on this report.

Let's now talk about Tuesday.

1. Tuesday, January 08th, 2008 (10:00 a.m. New York Time) USA
At 10 a.m. we will have U.S. Pending Home Sales coming out. It is expected to come out at -0.3%. I think we need to be more conservative on this report and use 5.0 trigger. If it comes out at 4.7% or higher, that would be positive for the U.S. dollar, and I would buy USD/JPY, looking for 30 pips move or more. If it comes out at -5.3 or more negative, I would sell USD/JPY and expect a move of 30 pips or more in the first hour of the report.

2. Tuesday, January 08th, 2008 (7:30 p.m. New York Time) AUSTRALIA
Then at 7:30 p.m. we will have Australian Retail Sales m/m coming out. It is expected to come out at 0.5%. I would trade 0.4 trigger on this one. If it comes out at 0.1% or lower, I would sell AUD/USD and expect 30 pips move. If it comes out at 0.9% or higher, that would be very positive for the AUD so you can buy AUD/USD and expect 30 pips move or more. Last month the number really overreacted and we saw 77 pips move on -0.4 deviation but in earlier releases sometimes you got a little more than 20 pips so be careful despite of December release. I think 30 pips is a good expectation - if you get more, great.

Thank you very much, and good luck with your trades.

To Our Success!
-Sir Pipsalot

(RTTNews) - Tuesday morning, the National Association of Realtors released its report on pending home sales in the month of November, showing that its pending home sales index fell more than economists expected compared to an upwardly revised reading for the previous month. The report showed that the pending home sales index fell 2.6 percent to a reading of 87.6 in November from a revised reading of 89.9 in the previous month. Economists had expected the index to fall 0.8 percent compared to the reading of 87.2 originally reported for October. Despite the monthly decrease, NAR noted that the pending home sales index remains above the August and September readings and said it indicates a broad stabilization. At the same time, the index is 19.2 percent below the November 2006 level of 108.4.

Well, fundamentally, we are waiting for price USDJPY to fall down 30 pips, according to Sir Pips a lot, due to below expected Home Sales.

But technically, there is a 1-2-3 bottom on the USDJPY 15min chart,around 3.48PM GMT, which signifies an upward trend move.At the break of the 2 neckline, price is likely to head north, despite disappointing Home Sales data.Now, for our price projection to the upside,

109.65-108.68=0.97
109.54+0.97=110.51( target point) after the break of 109.86 to the upside

after the break of 108.95 to the downside, target pont is
109.65-109.10=0.55
109.02-0.55=108.47