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Forex Signal (Thu February 17 2011, 8:30am NY Time EST) - US Core CPI

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Feb 16, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    We’ll be trading US Core CPI m/m release today. CPI or Consumer Price Index, also known as the “true cost of living”, it is what drives Central Banks to raise/cut interest rate, therefore this release will be widely watched. Here’s the forecast for the CPI:

    8:30am (NY Time) US Core CPI m/m Forecast 0.1% Previous 0.1%
    ACTION: 0.3% BUY USDJPY / -0.1% BUY EURUSD


    The Trade Plan
    Our minimum tradable deviation for this release is 0.2%; if the release number (core) increases to a minimum 0.3% then we will BUY USD/JPY. If the CPI number decreases to -0.1% or less, we’ll BUY EURUSD. Historically even at a difference of 0.1%, market is likely to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips within the next 90 minutes or so.

    We'll be trading this release using our after news retracement trade method. Since both CPI and Retail sales are scheduled at the same time, waiting for retracement is not only the logical thing to do, but also the safe thing to do.

    For more information on my trading methods:
    Henry's news trading methods.

    The Market
    CPI is expected to remain steady and at a slow pace of increase. Market is currently focusing on issues with economic recovery and employment, which leaves inflation on the backburner. It the highly unlikely chance US Core CPI were to surprise to the upside, market would probably react to it for the very short-term, or about 2 hours.

    If we do get a surprise on the inflation front, with recent encouraging growth in the housing market, improvement in the unemployment rate, and record high PMIs, market could speculate that the Federal Reserve may be addressing inflation issue sooner than later and leads to hike rates ahead of schedule.

    Additional Thoughts
    The best time to trade this release would probably be during the NY Equity market open at 9:30am as this release is not a strong market mover... unless we get a strong Retail Sales, it's probably best to stay out then.

    PreNews Consideration
    There is no pre-news bias for this release.

    DEFINITION:
    “CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).” It is also known as the “True Cost of Living”.

    Historical Data & Chart Of US Core CPI.


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Feb 16, 2011
    Lasted edited by : Sep 8, 2016
  2. Huwee

    Huwee Corporal

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    This might be a copy 'n paste error? I see that US Retail Sales came out at the same time last month, but this month they don't appear to be (at least I couldn't see them on the FPA calendar or ForexFactory calendar).
     
  3. qwerty63

    qwerty63 Private

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    re:

    Right. Probably it should be "Since both CPI and Unemployment Claims"... Now this sentence is logical.
     
  4. seethestars

    seethestars Private

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    Hello Henry. Once again many thanx for your time and energy.
    David
     
  5. Geert Anthonis

    Geert Anthonis Private, 1st Class

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    Maybe a silly question. How to hear the news here in Asia?

    Simply put. I live in Taiwan. WHat is the fastest or easiest way to hear the live reports Henry is talking about?
    For example: LInks to internet live radio broadcasts or links to sites that put this information up as soon as it is put out. I checked and googled for US CPI but the best link seems to be Forex Peace Army do they put up the results immediately?

    Thank you to help out this newbee Forex trader.

    Geert
     
  6. PipDog

    PipDog Corporal

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    How Much You Want To Pay?


    All of the 'fast' links cost money. The free ones are slow.
     
  7. Geert Anthonis

    Geert Anthonis Private, 1st Class

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    Thank you.

    Thank you Pipdog. You are right of course. Still if the news comes out at 8.30 am and by 8.30.30 you can find the results on Forex Peace Army then that is plenty fast for me.
     
  8. seethestars

    seethestars Private

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    Hello Henry. Once again many thanx for your time and energy.
    David
     

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