Forex Trading Signals by Magister Pips, 2012/01/27
0830 US GDP QoQ Annualized - Advanced (+3.0% exp, +1.8% prior,+2.4% to +4.5% range) majority 2.7% to 3.2%
Top Ranked Analysts Estimates: 1st 3.2% 2nd 3.0% 3rd 2.7% 4th 3.4% 5th 3.1% 6th 2.8% 7th 2.7%
Affliated Reports:
US Personal Consumption (+2.4% expected, +1.7% prior, +1.2% to +3.6% range) majority 2.2% to 2.7%
US GDP Price Index (+1.9% exp, +2.6% prior, +0.6% to +2.6% range)
US Core PCE q/q (+0.9% expected, +2.1% prior, +0.8% to +2.4% range)
Last month's -0.2 deviation saw little action on USDJPY, CADJPY declined 15 pips and reversed back above
pre-release after an hour. The EURUSD, AUDUSD and dollar crosses dropped in US Dollar strength based on
a bit of risk aversion due to the lower figure, euro, cable & kiwi dropped about 30 pips over 20 minutes,
AUD about 40 pips. Better moves on Stock Index Futures with the DAX dropping from 5880 to 5830 for 50
points or 100 ticks (2 ticks per point) and the EMini dropped 5 points from about 1245 to 1240 for a total
of 20 ticks (4 ticks per point). Of course this was the final release for Q3, and today we have the advanced
GDP data for Q4, so this could have bigger moves, because there is more likely to be a surprise. In general
the estimates are up for Q4, things appear to be better, and anyway on Wednesday Beranke pledged to do
whatever necessary whether things get worse or just go sidewise for years. Last Advanced release was in
october, and actually it came out spot on as predicted, the good deviation was on the 2nd or Preliminary
release where there was a -0.5 deviation, and the USDJPY actually went up, only by 15 pips but still the
major move again was the US Dollar strengthening on risk aversion. It took a couple of minutes but EURUSD,
AUDUSD, NZDUSD & GBPUSD did sell off until the top of the hour 9am EST. Actually a +/-0.5 deviation is not
that frequent, so why the USDJPY did not react probably has something to do with the fact it is at record
lows and the Bank of Japan really does not want to see it go any lower. Earlier this week USDJPy did break
a major 4.5 year trendline but has pulled back since Beranke's FOMC statement, but if it can get off its
lows into more middle ground then perhaps it will trade better on us news. For now it is best to trade the
stock indices. If not then a yen cross like CADJPY would work. You will have to see if the US Dollar starts
to gain if there is a lower print, a higher print should bring risk-on trade, and US dollar will probably
sell off. In the past we used a +/-0.4 this was widened to +/-0.6 after October, however rather than widen
out it seems best to just avoid the USDJPY and trade something else. Stock indices are preferred there are
many forex brokers which have these indices on their platforms, a Commodity vs Yen cross is next best. This
is for spike trading, a +/-0.6 is safe, but even lower is possible on indices, there were good moves last
month on -0.2 on dax for instance. Another option is to let the number come out and watch the xxx/USD majors
they might wiggle a bit at first but then should follow the theme of risk on or off. The figure seems very
optimistic to me, I am going with my gut here and will widen out the sell trigger, the buy could be tightened
a notch to if you want.
If it comes out at +3.5% or higher, Buy Emini, Dax, or CAD/JPY.
If it comes out at +2.4% or lower, Sell EMini, Dax, or CAD/JPY.
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