8:30am (NY Time) US Core CPI m/m Forecast 0.1% Previous 0.2%
ACTION: USD/JPY BUY 0.3% SELL -0.1%
Our focus will be on the Core CPI release and we are going to look for a surprise factor of 0.2%; if the release number (core) increases to a 0.3% then we will BUY of USD/JPY. If the CPI number decreases to -0.1% or less, we’ll SELL USD/JPY. Historically even at a difference of 0.1%, market is likely to to exaggerate, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips.
Since US CPI is considered as global news event, an unexpected higher release will probably be considered as risk appetite whereas an unexpected lower release will probably be considered as risk aversion. However, it’s very important to pay attention to the initial spike to confirm your trading decision, as I recommend to wait for the release and market reaction first, then jump in later.
DEFINITION:
“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).” It is also known as the “True Cost of Living”.
Related posts:
- US CPI m/m 10/15/09
- US Core CPI m/m 09/16/09
- Canada Core CPI m/m 10/16/09
- Canada Core CPI m/m 11/18/09
- Forex Trade Plan For Canada Core CPI m/m 09/21/10
- Forex Trade Plan For CA Core CPI m/m 08/20/10
- Forex News Trading Canada Core CPI m/m 10/22/10
- Forex News Trading Canada Core CPI m/m 11/23/10
- Forex News Trading Plan For CA Core CPI m/m 01/25/11
- Forex News Trading Canada Core CPI m/m 03/18/11
{ 5 comments… read them below or add one }
i will ever be greatful for your gift of assistance to people, God bless u. henry the triger number for us existing home sales is 400 if add to previous it gives 405.71 and if minus is greater how do u get yours that is 6.11m buy, 5.37m sell.
please henry my teacher taught me not to trade any high impart that the lease is in red but only trade with high impart that the release is in green but there are some release that macthes with my calculation, but is with red as a professional trader, what is ur advice in this.
eme:
6.11M = 6,110,000
We are looking for 400,000 of difference. So make sure you get the Million and 400K terminology correct.
THanks,
Henry
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Hi henry, been following you for about a week now. just want to ask on usd core cpi report. why did you choose usd/jpy over eur/usd and gpbusd? many many thanks.
Roger:
The quick answer is that JPY and USD are both safe haven and carry currency. So news out of U.S. are expected to give a more “pure” movement versus the JPY than any other currency, THus USD/JPY is my obvious choice. But as I always said, even though I use USD/JPY in my analysis, the point is to use that pair as a gauge, but to take actual trades on EUR/JPY or GBP/JPY.
Thanks,