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Forex Signal (Fri, August 27 2010, 8:30am NY Time EDT) - US Prelim GDP q/q...

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 27, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    Here’s the forecast for U.S. Prelim. GDP:

    8:30am (NY Time) US Prelim GDP q/q Forecast 1.5% Previous 2.4%
    ACTION: USD/JPY BUY 1.8% SELL 1.2%

    The Trade Plan

    Our main focus tomorrow will be on the second of three quarterly (Q2) release of U.S. GDP number (Prelim). We are looking for a minimum deviation of 0.3% on the forecasted figure of 1.5%. Therefore if we get a 1.8% on the Prelim 2nd quarterly GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 1.2% release or worse, then we would be SELLING USD/JPY. We’ll be looking to trade this release based on my Retracement Trading Method; since this is a high impact release, strong market volatility is expected immediately after the release.

    We'll be trading this release using an after-news retracement method. For more information on my trading system:
    Henry's news trading method

    The Market
    With Prelim GDP being the second GDP release of the three, it is usually ignored by the market. But with the possible large revision due to recent negative data, market will be paying attention to this release... There are talks of an even worse release than the already deeply discounted forecast of 1.5%.

    However, judging the risk averse market conditions of the past few days, I believe current forecast is priced in and if we get an as expected release, or slightly worse release, there should be very limited market volatility as USDJPY has been trading around support.

    But if we were to get a stronger release, we should expect to see USD/JPY recover above the 87 to 88 level by the end of the day...

    Additional Thoughts
    US is the largest economy in the world and it’s GDP is a reflection of global economy. Therefore, this release will be considered as global risk event by traders. Here are the scenarios:

    1. Better GDP = Risk Appetite: JPY should lose strength immediately, making all JPY pairs move up (GBP/JPY, EUR/JPY, USD/JPY, AUD/JPY), and expect to see USD remaining strong against other majors.
    2. Worse GDP = Risk Aversion: JPY should gain strength immediately, dragging down the USD/JPY pair. USD should also be weak across the board. If the GDP release drops down significantly, we could see flight for safety movement in the market as USD could actually gain strength on the back of demands for US treasuries. This would be an extreme case if GDP misses expectation by a huge deviation such as 1% or more.

    Pre-news Considerations
    I’d probably stay out of the pre-news market as I believe recent market activities has already priced in this release. As a matter of fact, I believe we may actually see some reversal in risk aversion sentiment after this release as speculators will be doing the typical "buy on rumor, sell on news".

    DEFINITION:
    “GDP, which is defined (from wikipedia) as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP number has a direct effect on the Interest rate of the currency, it is one of the news indicators that affects FOMC’s decision directly.”

    Historical Chart & Data For US Prelim GDP


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Aug 27, 2010
    Lasted edited by : Sep 8, 2016
  2. M.Nazri

    M.Nazri Private, 1st Class

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    BEST

    Thank you sir for the analysis.... i will keep your word and NICE WEEKEND;)
     
  3. 15IHc

    15IHc Recruit

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    fxEd

    I'm relatively new to trading and forex trading in particular, as this question probably reflects.

    Timeliness is obviously very important when trading in response to news signals. How can I gain access to the various news announcements each day at the times they are actually released?
     
  4. Vladon

    Vladon Private, 1st Class

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    First of all, you can get this info from Forex Factory
    but they are usually late about 15-30 seconds.

    If you would like more timely info, you should try Trade The News
    (https://www.tradethenews.com/) or Fast Economic News
    (Fast Economic News / Secret News Weapon SNW) but they are both paid subscriptions.
     
  5. Princewill

    Princewill Recruit

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    what if release is within s factor???

    Hi Henry,

    You have been doing great work helping the newbies. Please help me to clarify which action to take if the actual release is within the s deviation factor. eg. btw 0-2.9%.

    Thanks and God bless you.
     
  6. mattt

    mattt Private

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    I'm in the same boat as Edward. I would love to follow along, but have no idea where to hear the live broadcast.

    Thanks for your help Henry - I think I speak for all of us when I say you are the man =)
     
  7. Vladon

    Vladon Private, 1st Class

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    I have posted the reply to Schlosser's post hours before but it still has not appeared here because moderator "needs" to approve it. A very strange site policy, as to my humble opinion.
     
  8. ecafyelims

    ecafyelims Corporal

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    policy explanation

    If it has a link, then a moderator needs to approve it. This policy is to prevent the deluge of spam.

    As far as I know, that's the only trigger to require mod approval.
     
  9. Cut7

    Cut7 Recruit

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    Henry,

    Please tell us what website we can go to find these news announcements as they happen. Thank you.
     
  10. ecafyelims

    ecafyelims Corporal

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    Live News

    You can try some paid services that will give you instant live news feeds. The issue is that unless you have a program to trade the news for you quickly, you'll usually miss the spike anyway. I'm not affiliated with any service, but I've heard good things about fasteconomicnews.com and tradethenews.com.

    I don't use either services myself. Instead, I trade the retrace.
    Henry wrote an article about how to trade here: Forex Peace Army Education> Forex Daily Trading Signals> Current Forex Trading Signals> Henry Liu & Forex Trading Signals - Explained... Part II

    When trading the retrace, a small delay doesn't hurt, and you can get the news for free by using the link Henry provides at the bottom of each of his signal articles.
    It's called "Historical Chart & Data For US Prelim GDP" on this specific article.

    Hope that helps.
     

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