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Forex Signal (Tue July 26 2011, 4:30am NY Time EDT) - UK Prelim GDP q/q

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

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    UK quarterly GDP release is always a high impact report. With this being the Prelim release, or the first release of three, we are likely to see more market participation. Here is the forecast number:

    4:30am (NY Time) UK Revised GDP q/q Forecast 0.2% Previous 0.5%
    ACTION: GBP/USD BUY 0.5% SELL -0.1%

    The Trade Plan

    Our deviation for today’s trade is 0.3% to SELL and 0.3% to BUY. We’ll look to possibly SELL GBP/USD at -0.1% of release figure or worse; BUY GBP/USD at 0.5% of release figure or better.

    Depending on the surprise of this release, we could go from after news retracement trade to spike trading. I believe if we get a 0.7% or better release, it justifies spiking trading to buy GBPUSD immediately. If we get -0.3%or worse, then it is also justified to SELL GBPUSD on a spike trade.

    For more information on my trading methods, please read:
    Henry Liu's Trading Method

    The Market
    After a -0.5% for 4th quarter of 2010 followed by a 0.5% on Q1 of 2011, today's GDP release essentially stated that for the past 9 months, UK's economy grew by 0.2%... If we get a negative number in the 3rd quarter of 2011, we could definitely call UK's economy in a net recession...

    Many factors are all pointing to a worse than expected release, starting with the global manufacturing slump initiated by the disaster in Japan, to the persistently high inflation squeezing disposable income out of household spendings, today's GDP will probably be at best, inline with consensus expectation of 0.2%.

    Additional Thoughts
    I’d be possibly inclined to jump in as a spike trade if we get a strong surprise either way, I believe market will remain driven by this release for an extended period of time, possibly extending the move through the end of the week.

    Pre-news Consideration
    There is no pre-news consideration for this release today. But due to the uncertainty of it all, I would probably be more inclined to a SELL than a BUY.

    GDP is defined 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 is the basically direct measure of the economy’s health, and a stronger GDP means that the central bank will more likely to raise interest to curb inflation.

    Historical Chart and Data for UK Prelim GDP q/q


    #1 Henry Liu, Jul 25, 2011
    Lasted edited by : Sep 8, 2016

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