Forex News Trading Plans for Week 4, Jan 19 – Jan 25 2014

[zaghloul]

Help me understand what happened with UK unemployment numbers.

Today's announcement in the UK, the unemployment rate went down from 7.4% to 7.1% (although it was expected to only go down to 7.3%). At the same time the change in benefit claimants went up from -34k to -24k (although it was expected that there would be -33k fewer benefits claimants).

So how can the unemployment rate go down considerably, but the change in benefits claimants go the other way? I set the parameters for the change in benefits claimants, but the trade went against me. Anyone understand this?

PS) I still managed to make a modest profit overall by reversing the trade after losing 22pips.

 

[RussellBrown]

"Help me understand what happened with UK unemployment numbers."

Same thing happened to me, FNG clicked sell and it should have been buy and I went in the wrong direction, wiped out half my bank, but its all a good learning experience I guess. Afterwards I studied it to try and work out what went wrong and I still have no idea?

Seems to be that the only figure than actually mattered was the 7.4% to 7.1%, but that was not an option on FNG?

 

[zaghloul]

All economic calendar services showed the unemployment figure having 'medium' importance while the claimant change as having 'high' importance. That makes sense too, since claimant figures are more reliable than unemployment percentages which have some degree of bias in how they are calculated. Regardless, I still don't understand how they moved in the opposite direction. FNG usually only has 'high' importance events, and thats why the unemployment release wasn't there. FNG clicked correctly, its the number that doesn't make sense.

 

[RussellBrown]

yes I know its important to understand these things for when it happens next time. If you come to a conclusion please let us know.

 

[apexsufyan]

how many time ago setting fng pl tell me

how many time ago setting fng pl tell me

 

[apexsufyan]

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[RussellBrown]

All the calendars were wrong, it was the 7.1% that was really significant, which was not an option on FNG..

UK unemployment rate plunged to 7.1%, its best reading in nearly 5 years, propelling pound to fresh weekly highs above 1.6550 in morning London dealing today. The UK labor statistics were much better than the anticipated rate of 7.3%. The decline in the unemployment rate now puts it within a whisker of the BoE threshold of 7.0%, although the UK central bank was very quick to note that there is no immediate need to raise short term rates even if the threshold is breached.

Although the UK labor data was impressive, there were some notes of concern that are likely to keep BoE stationary for the time being. UK claimant count did not drop as much as expected contracting only by -24K versus -33.8K eyed and average earnings rose a paltry 0.9% versus 1.1% forecast suggesting that wages remain depressed for the time being.
- See more at: UK Unemployment Plunges-Puts Pressure on BoE - ForexNews.com

 

[RussellBrown]

I am amazed the economic calenders had them all as high impact events, when only one was. I wonder if there is a more reliable economic calendar?

 

[zaghloul]

Here is an answer I got from another site. It makes some sense, but I still don't understand why the claimants number was in the opposite direction.

"More importantly was the context that you missed. There was a concern among market participants that the BoE would change their target of unemployment from the current 7% to a lower amount (like 6.5%), effectively allowing them to continue monetary easing policy longer. Because they didn't do that despite the 7.1% number (which is very close to their target), it was taken as an overall rather positive sign for the GBP."

 

[RussellBrown]

"More importantly was the context that you missed. There was a concern among market participants that the BoE would change their target of unemployment from the current 7% to a lower amount (like 6.5%), effectively allowing them to continue monetary easing policy longer. Because they didn't do that despite the 7.1% number (which is very close to their target), it was taken as an overall rather positive sign for the GBP."

Does anyone know a place where we can read about stuff like that in advance?