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Forex Signals (Wednesday April 18, 2012 NY TIME 6:45pm EDT) – NZ CPI q/q

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Apr 18, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Jul 29, 2011
    Likes Received:

    Please see my trade plan below,

    NZ CPI q/q
    Forecast 0.6%
    Previous -0.3%
    Pair to trade: NZD/USD

    Numbers we need:
    BUY NZD/USD 0.1%
    SELL NZD/USD 0.0%

    Economical Impact: High
    Typical Result: Good for currency
    Occurrence: Quarterly, 15 days after the quarter ends
    Spike Probability: Good but, be mindful that trade has tendency to reverse after spike

    About our Triggers:
    NZ CPI q/q is forecasted to arrive at 0.6%.
    If we get 0.1% or better I will look to enter a LONG position on NZD/USD and if we get 0.0% or lower I will go SHORT on NZD/CAD.
    Should this report be triggered, we can expect to see about 30pips on the initial spike.

    What is it? And why does the market care?
    The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
    Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate

    A higher than expected reading should be taken as positive/bullish for the NZD.
    A lower than expected reading should be taken as negative/bearish for the NZD.

    Method I use to trade this:
    Stavro D’Amore Trading Method

    I will look for a 50% retracement in the original spike before entering a trade if trade falls below the 50% spike I will look to go the opposite direction as this trade is likely to reverse. I will be looking at a 15 minute chart. I will close half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

    NOTE: I will not take this retracement on this trade unless our triggers are hit.

    My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyse this.

    NZ releases are known to have latency, Should you decide to trade spike please do in caution.

    Historical Chart and Data for NZ CPI q/q

    All the best

    Stavro D’Amore
  2. chatdaddy

    chatdaddy Recruit

    Mar 13, 2012
    Likes Received:
    Don't you mean 1% and not 0.1% for the buy? The 0.1 buy and 0.0 sell just doesn't look right. Both numbers are below the forecast number. One should be higher and one should be lower.

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