Intraday strategies for beginner traders on January 15

[Ben Graham]

The dollar continued to rise against a number of risk assets after another round of US inflation data.

US Producer Price Index data for November last year supported the dollar, driving EUR/USD lower. The PPI increased by 0.2% month-on-month, exceeding analysts' expectations of a 0.1% rise. The annual figure also beat forecasts, coming in at 3.0%. These data indicate that inflationary pressure in the US economy remains persistent, which in turn may prompt the Federal Reserve to maintain a cautious monetary policy.

Today market participants will focus on a new set of economic indicators from Europe, which have been scarce recently. Special attention will be paid to the release of France's consumer price index, an important barometer of inflationary pressure in the eurozone's second-largest economy. A CPI print above forecasts could indicate persistent inflation and thus support the euro. The industrial production change in the eurozone will also attract interest. This indicator reflects real-sector dynamics and serves as a gauge of overall economic activity. A substantial increase in industrial production could signal a recovery in the eurozone economy and strengthen the euro. The trade balance result is also an important indicator, characterizing the eurozone's competitiveness on the world market. A positive balance indicates exports exceed imports, which supports the national currency.

Finally, the European Central Bank's economic bulletin will provide market participants with a deeper analysis of the current economic situation in the eurozone and monetary policy prospects. Traders will also pay attention to ECB projections.

If the data match economists' expectations, it is better to act using a Mean Reversion strategy. If the data are much higher or lower than expectations, it is best to use a Momentum strategy.

Momentum Strategy (on breakout):

For EURUSD

• Longs on a breakout of 1.1650 may lead to the euro rising toward 1.1676 and 1.1697;
• Shorts on a breakout of 1.1624 may lead to the euro falling toward 1.1591 and 1.1558;

For GBPUSD

• Longs on a breakout of 1.3441 may lead to the pound rising toward 1.3461 and 1.3489;
• Shorts on a breakout of 1.3417 may lead to the pound falling toward 1.3392 and 1.3370;

For USDJPY

• Longs on a breakout of 158.53 may lead to the dollar rising toward 158.81 and 159.12;
• Shorts on a breakout of 158.28 may lead to dollar sell?offs toward 157.96 and 157.72;

Mean Reversion Strategy (on return):

For EURUSD

• I will look for shorts after a failed breakout above 1.1652 on the return below that level;
• I will look for longs after a failed breakout above 1.1625 on the return to that level;

For GBPUSD

• I will look for shorts after a failed breakout above 1.3445 on the return below that level;
• I will look for longs after a failed breakout above 1.3417 on the return to that level;

For AUDUSD

• I will look for shorts after a failed breakout above 0.6695 on the return below that level;
• I will look for longs after a failed breakout above 0.6666 on the return to that level;

For USDCAD

• I will look for shorts after a failed breakout above 1.3910 on the return below that level;
• I will look for longs after a failed breakout above 1.3880 on the return to that level;

The material has been provided by InstaForex Company - www.instaforex.com