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Forex Signal (Fri January 28, 2011 8:30am EST) US Adv. GDP q/q

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jan 28, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We are also getting the Canadian monthly GDP release at the same time of this release, however I’d recommend to trade the U.S. release only as the market will be paying much more attention to it, especially when the Feds are also watching it. Here’s the forecast for U.S. Adv. GDP:

    8:30am (NY Time) US ADV GDP q/q Forecast 3.5% Previous 2.6%
    ACTION: 3.8% SELL EURUSD 3.2% BUY EURUSD


    The Trade Plan
    Our main focus tomorrow will be on the first of three quarterly (Q4) release of U.S. GDP number (ADV). We are looking for a minimum deviation of 0.3% on the forecasted figure of 3.5%. Therefore if we get a 3.8% on the advanced 4th quarter GDP, it would be US Dollar positive. We will SELL EURUSD. However, if we get a 3.2% release or worse, then we would be BUYING EURUSD.

    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. If we get 0.5% in deviation, then I think we could jump into this trade using Spike Trading Method.

    For more information on my trading methods:
    Henry's News Trading Methods

    The Market
    With Adv. GDP being the first GDP release of the three, it is usually the most volatile GDP releases with the highest potential for a surprise number. Because of the high impact GDP has on future monetary policy, and the fact that this will probably be the most important news until NFP release scheduled for next Friday...

    The medium forecast out of 67 economists surveyed by Bloomberg agree that the annual GDP rate ending in December 2010 will be at 3.5%. With one of the best retail sales figures in four years for December, record Ipad sales as reported by Apple for this quarter, and some of the highest credit card spendings in 3 years as reported by MasterCard Advisors, we could expect to see an inline with expectation release, if not better. (In my opinion)

    Additional Thoughts
    US is the largest economy in the world, it's GDP is made up 2/3 of Consumer Spending, and a positive GDP shows resilience in the U.S. economy and a strong message that economic recovery is still live and well in the U.S. Therefore, this release will be considered as risk event by traders.

    In the event of a positive surprise, we could also look to trade USDJPY as an alternative for EURUSD.

    Pre-news Consideration
    I'd stay away from Pre-news because of the uncertainty in the current market, but if I were to force a trade, I would bet on USD long.

    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 data and charts on US GDP q/q.

    Thanks,


    [​IMG]
     
    #1 Henry Liu, Jan 28, 2011
    Lasted edited by : Sep 8, 2016
  2. kasfulfx

    kasfulfx Recruit

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    Thanks A Lot

    thanks Henry!
     
  3. Irena

    Irena Private

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    Thanks for this, Henry!
    I am sorry if I ask very stupid question, but what source do you recommend to listen to the news live or get quick updates about the information released on the internet?
    Many thanks,
    Irena
     
  4. peterhere

    peterhere Recruit

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    "We are also getting the Canadian monthly GDP release at the same time of this release" ... We are not :) Things are changing Henry :) btw. I have made some money due to your work. Thanks a lot !
     
  5. Agent86

    Agent86 Sergeant

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    Eur/usd Gdp

    Hi

    I was concerned about the Buy of the EUR/USD if it came in at 3.2 because that is lower then expectations of 3.5 yet higher then previous of 2.6 which could be perceived by many as a negative or positive impact on the EUR/USD meaning USD weakness Buy EUR/USD or USD strength Sell EUR/USD.

    I think I'll stay out on this one until I get a positive confirmation of direction on the 5min chart.

    Nice signal and it appears at the current moment at least an easy 15pip on this call so far if I had taken the trade.

    Thanks for the signals
     
  6. PipDog

    PipDog Corporal

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    Signal Not Working Out

    The .3 trigger on the GDP to sell USD was too tight. -.3 is still much better than previous. Anyone that took this signal at face value and bought the EURUSD is either getting whacked or got out really quick.

    The EURUSD was near the top of it's current range/trend. Be very careful about trying to plow new ground.

    Apparently, risk aversion has taken over and the USD is going to strengthen and bit, then it'll likely move sideways. BTW...I sold the AUDUSD...picked up 15 pips.

    Good luck folks.
     
  7. Agent86

    Agent86 Sergeant

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    Market seems to be deciding

    Market seems to be deciding this is good for the USD

    So a sell of the EUR/USD for me it now confirmed after the retrace and break of the low on the 5min chart

    So let me see how my hesitation of the release turns out,
     
  8. Agent86

    Agent86 Sergeant

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    Roger that.

    Well, looks like the 5min break of support did not hold and reversed so it would appear either going sideways, or perhaps to continue on the current path longward.

    I took my lumps on this one.
    Oh well onward.
     
  9. reyesbenb109

    reyesbenb109 Recruit

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    Henry I fallowed your advise thinking you were some what good too bad I lost money In my opinion you're not qualified to give advise
     
  10. Patrick Thorn

    Patrick Thorn Recruit

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    What is your opinion Henry on hedging news items?
     

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