Henry Liu
Former FPA Special Consultant
- Messages
- 473
Here is the forecast for the US Advanced GDP q/q :
8:30am (NY Time) US Advance GDP q/q Forecast 1.9% Previous 3.9%
ACTION: USD/JPY BUY 2.2% SELL 1.6%
The Trade Plan
We are looking for a minimum deviation of 0.3% on the forecasted figure of 1.9%. Therefore if we get a 2.2% on the first quarter GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 1.6% release or worse, then we would be SELLING USD/JPY or 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.
We’ll be trading this release using an after-news retracement method.
For more information on my trading methods, please read:
Henry Liu's Trading Method
The Market
Fed Chairman Bernanke held a news conference yesterday following the FOMC monetary policy statement and the FED Funds Rate decision earlier in the day. Ultimately, the Fed decided to keep the low interest rate policy in place in order to counteract rising inflation.
Advanced GDP release for the first quarter is projected to be slightly down as gas prices rose which yielded consumers to cut back on spending. On the other hand, business investments and manufacturer production rose in response to foreign demand. But still, a lack of momentum in the housing market recovery as well as high priced commodities are keeping the inflation level at an undesirabley high level.
The demand for commodities in emerging markets remains high, especially with oil. Unfortunately, the Midlle East supply continues to be constrained as a result of political instability.
New and existing home sales were up but house prices continued to decline for the eighth straight month while foreclosure numbers continued to rise.
All in all, The Fed looks to continue to pump life back into the economy and speed up the momentum by purchasing 600 Billion dollars in Treasury Bills while liquidating close to 1.4 billion in troubled assets in order to level off long term and short term rates to make loans less expensive.
Additional Thoughts
With Adv. GDP being the first GDP release of the three, it is usually the most volatile GDP release with the highest potential of a surprise number. Because the impact of GDP on future monetary policy, this event has the potential of changing both the long-term and short-term trend of USD. It’s definitely an event worth trading.
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 and Data for US Advance GDP q/q
Thanks,
8:30am (NY Time) US Advance GDP q/q Forecast 1.9% Previous 3.9%
ACTION: USD/JPY BUY 2.2% SELL 1.6%
The Trade Plan
We are looking for a minimum deviation of 0.3% on the forecasted figure of 1.9%. Therefore if we get a 2.2% on the first quarter GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 1.6% release or worse, then we would be SELLING USD/JPY or 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.
We’ll be trading this release using an after-news retracement method.
For more information on my trading methods, please read:
Henry Liu's Trading Method
The Market
Fed Chairman Bernanke held a news conference yesterday following the FOMC monetary policy statement and the FED Funds Rate decision earlier in the day. Ultimately, the Fed decided to keep the low interest rate policy in place in order to counteract rising inflation.
Advanced GDP release for the first quarter is projected to be slightly down as gas prices rose which yielded consumers to cut back on spending. On the other hand, business investments and manufacturer production rose in response to foreign demand. But still, a lack of momentum in the housing market recovery as well as high priced commodities are keeping the inflation level at an undesirabley high level.
The demand for commodities in emerging markets remains high, especially with oil. Unfortunately, the Midlle East supply continues to be constrained as a result of political instability.
New and existing home sales were up but house prices continued to decline for the eighth straight month while foreclosure numbers continued to rise.
All in all, The Fed looks to continue to pump life back into the economy and speed up the momentum by purchasing 600 Billion dollars in Treasury Bills while liquidating close to 1.4 billion in troubled assets in order to level off long term and short term rates to make loans less expensive.
Additional Thoughts
With Adv. GDP being the first GDP release of the three, it is usually the most volatile GDP release with the highest potential of a surprise number. Because the impact of GDP on future monetary policy, this event has the potential of changing both the long-term and short-term trend of USD. It’s definitely an event worth trading.
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 and Data for US Advance GDP q/q
Thanks,
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