Forex Trading Signals by Magister Pips, 2012/02/09
0430 UK Industrial Production (MoM) (+0.2% expected, -0.6% prior, -0.3% to +0.4% range)
Affliated Reports:
UK Industrial Production (YoY) (-3.1% expected, -3.1% prior, -3.6% to -2.8% range)
UK Manufacturing Production (MoM) (+0.2% expected, -0.2% prior, -0.8% to +0.5%)
UK Manufacturing Production (YoY) (+0.3% expected, -0.6% prior, -0.7% to +0.6%)
UK Visible Trade Balance GBP/Mn (-£8600 expected, -£8644 prior, -£9000 to -£8000)
UK Trade Balance Non EU (-£5000 expected, -£5021 prior, -£5300 to -£4900)
UK Total Trade Balance (-£2700 expected, -£2566 prior, -£9230 to -£2000)
Last month a -0.5% on IP m/m came with a -0.3% revision to the previous month, the YOY figure was -0.9%
with a -0.4% revision. Price moved down about 10-20 pips, however the GBPUSD pair had been selling off
since the day before. The move was quite aggressive and said to be coming from some New York Banks.
While the News from EUrope was bad, the Pound actually sold off more than the Euro or any other pairs,
truely the laggard of the day. Of course this was just 3 days or so before S&P Ratings cut France and
a bunch of other Eurozone countries Soverign Ratings and the EURUSD hit a low of 1.2630, which GBPUSD
was dragged along for the ride. Anyhow there were clear 'foot-prints' of front-running the news.
Perhaps there was a leak, or the data these banks compile on their own was enough to give them a strong
reason to believe the number would be weaker. It was and profit was taken and the pair then started to
reverse. We have to remember that we are reacting to the news, and this will always be after someone
who may have been ahead of the curve and predicted what it would be. Anyhow the deviation was not enough
for us to get interested in...well just. We have seen deviations of about +/-0.4 in the past month give
small 10-20 blips then turn around, sometimes with the other figures conflicting other times not. In
August 2011 a -0.4 deviation did provide a decent move of about 50 pips although there was some pre-news
movement in the last few minutes before the release. Normally we look for a +/-0.5 on this one but from
last month we started widening these out to +/-0.8 which is quite unlikely to get hit. We have Trade
Balance as well. The Visible Trade Balance is most important of the 3. In December 2011 a +£1843 dev.
did bring a rally to the Pound of about 45 pips over 20 minute. It came out with PPI which also deviated
higher. The month before the number came out -£1814, this time without PPI data, and the Pound sold off
40 pips over 25 minutes. So this deviation of +/-1800 seems to be good, if both it and IP can deviate
in the same direction it will help the British Sterling pairs move better. If Trade Balance does deviate
by +/-$1800 then perhaps the trigger on Industrial Production could be lower...like +/-0.6..this is if you
are using the Elite Weapon to tie reports together.
If IP comes out +0.8% or higher, and TB is -$6800 or higher, GBP/USD should rally 35-65 pips
If IP comes out -0.4% or lower, and TB is -$10400 or higher, GBP/USD should drop 45-80 pips
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