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Forex Signal (Thu May 26 2011, 8:30am NY Time EST) - US Prelim GDP q/q (2nd release)

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 25, 2011.

  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 2.2% Previous 1.8%
    ACTION: USD/JPY BUY 2.5% SELL 1.9%

    The Trade Plan
    Our main focus today will be on the second release of the quarterly US GDP figure of Q1 2011. We are looking for a minimum deviation of 0.3% on the forecasted figure of 2.2%. Therefore if we get a 2.5% on the Prelim GDP, it’s positive for the USD and We’ll BUY USD/JPY. However, if we get a 1.9% release or worse, then we’ll SELL USD/JPY or BUY 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 system:
    Henry Liu's Trading Method

    The Market
    The US Economy is estimated to increase an annualized 2.2% in Q1 GDP amidst an initial forecast for a 1.8% expansion. This could add momentum for the year and it’s believed that the primary reason in the upward revision are small increases in various net contributions such as personal consumption. Still, economic recovery remains sluggish and the GDP revision isn’t expected to boost unemployment figures over the long term.

    Remember, only expect market reaction if our deviation points are hit.

    Additional Thoughts
    US is the largest economy in the world and it’s GDP is a reflection of global economy. However, as stated before Prelim GDP being the second release, we are not likely to get any surprise, therefore be prepared that we may not get a trading opportunity from this release today.

    Pre-news Considerations
    There are no pre-news consideration for this release.

    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 Prelim GDP q/q



    Thanks,


    [​IMG]
     
    #1 Henry Liu, May 25, 2011
    Lasted edited by : Sep 8, 2016

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