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Forex Signal (Friday August 26, 2011 NY TIME 8:30am EDT) - US Prelim GDP q/q

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Aug 25, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    US Prelim GDP q/q
    Forecast 1.1%
    Previous 1.3%
    Pair to trade: EUR/USD


    Numbers we need:
    BUY EUR/USD 0.8%
    SELL EUR/USD 1.4%

    Economical Impact: High
    Typical Result: Good for currency - While this is the ‘usual’ effect, under current market conditions the reverse tends to be true against some currencies. As bad data has been triggering the purchase of US bonds, I will trade EUR/USD and not consider USD/JPY on this trade.
    Occurrence: Released quarterly, about 60 days after the quarter ends
    Spike Probability: Good, we can see 45 pips on initial spike

    About our Triggers:
    US Prelim GDP q/q is forecasted to arrive at 1.1%.
    We are looking for a deviation of 0.3% either way on this trade.
    If we get 1.4.% or better I will look to enter a SHORT position on EUR/USD and if we get 0.8% or lower I will go LONG on EUR/USD.
    Should this report be triggered, we can expect to see about 45 pips on the initial spike.

    NOTE: We have US GDP price index business investments due at the same time; however I do not see a risk in conflict.

    What is it? And why does the market care?
    The Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator for the economy's health. While this is q/q data, it's reported in an annualized format (quarterly change x4). The 'Previous' listed is the 'Actual' from the Advance release and therefore the 'History' data will appear unconnected. There are 3 versions of GDP released a month apart - Advance, Preliminary, and Final. The Advance release is the earliest and thus tends to have the most impact.

    A higher than expected reading should be taken as positive/bullish for the USD,
    A lower than expected reading should be taken as negative/bearish for the USD.

    Method I use to trade this:
    Stavro D’Amore Trading Method
    I will look for a 30% to 50% retracement in the original spike before entering. I will be looking at a 5 minute chart. I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

    My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyse this.

    I do recommend spike trading as an option when there is great uncertainty in the markets; also the liquidity is very good at the moment if you are using an ECN broker. Please use no more than 12 pip limit order.

    Historical Chart and Data for US Prelim GDP q/q

    Have a great restful weekend.

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Aug 25, 2011
    Lasted edited by : Sep 8, 2016
  2. Atobev

    Atobev Recruit

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    Thank you for your info I will check out the result.
     
  3. dave edwards

    dave edwards Private, 1st Class

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    great info

    Hi There, just want to expres my thanks for sharing your knowlwedge with us. much apreciated. Regards from Cape Town
    Albino3
    new recruit
     
  4. LEXngton

    LEXngton Corporal

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    98-99% certainty of a no trade with your triggers. A 2.0 deviation from expected number has not happened on US Preliminary GDP going back as far as Feb. 20, 2000, over 11 years. Largest deviation from expected going back that far, Feb. 20, 2000, was -0.8 on Feb. 27, 2009 and that large a deviation itself is very rare. Suggest lowering them significantly.
     
  5. adeniyia33

    adeniyia33 Recruit

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    Release

    Thank you Stave, I am new to trading and wish you could help me on how I can know the exact release e.g 4.2 , -0.2 ... as u normally include in your releases. Thank you once more for being out there and I wish u do more.
     
  6. johanne

    johanne Recruit

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    johanne

    Thanks so much Stavaro...
     
  7. yurps

    yurps Private, 1st Class

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    usdjpy

    best to stick to the USDJPY pair on this....

    MArket can react to Risk Aversion theme or US Economic fundamentals, and only the USDJPY lines them up both on the right side.
     

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