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Forex Signal (Tue November 23 2010, 8:30am NY Time EST) - US Prelim GDP q/q

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Nov 22, 2010.

  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 2.3% Previous 2.0%
    ACTION: USD/JPY BUY 2.6% SELL 1.9%

    The Trade Plan

    Our main focus tomorrow will be on the second of three quarterly (Q3) release of U.S. GDP number (Prelim). We are looking for a minimum deviation of 0.3% on the forecasted figure of 2.3%. Therefore if we get a 2.6% on the Prelim 3rd quarterly GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 1.9% release or worse (looking for 0.4% deviation), then we would be SELLING USD/JPY or BUYING GBPUSD. 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's news trading method

    The Market
    With Prelim GDP being the second GDP release of the three, it is usually ignored by the market. But with the possible large revision due to recent positive outlook, market will be paying attention to this release... There are talks of an better than expected release already priced in.

    However, with FOMC meeting minutes coming up at 2 pm, market could just hold off until then, therefore unless we get our tradable deviation, we should stay out of the market.

    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 we may not get a trading opportunity.

    Pre-news Considerations
    I’d probably stay out of the pre-news market as I believe speculators are waiting for the FOMC minutes for direction...

    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 & Data For US Prelim GDP


    Thanks,


    [​IMG]
     
    #1 Henry Liu, Nov 22, 2010
    Lasted edited by : Sep 8, 2016

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