8:30am (NY Time) US Core CPI m/m Forecast 0.1% Previous 0.1%
ACTION: USD/JPY BUY 0.3% SELL -0.1%
We’ll be trading the Core CPI release today and our surprise factor (or deviation) is 0.2%; if the release number (core) increases to a minimum 0.3% then we will BUY USD (either SELL EUR/USD or BUY USD/JPY). If the CPI number decreases to -0.1% or less, we’ll SELL USD (BUY EUR/USD or SELL USD/JPY). Historically even at a difference of 0.1%, market islikely to to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips. If you remember what I wrote last time, this is exactly the same consensus expectation as the market is looking at a low yet steady growth in U.S. Inflation for quite some time now…
Since US CPI is a global event and with the recent USD uncertainty, this news could move the market significantly should we get a huge surprise. As a much higher CPI number will once again change the current expectation on the long-term view of USD and increase demand, whereas a much lower release of CPI would do exactly the opposite.
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 Core CPI m/m 11/18/09
- 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 News Trading Canada Core CPI m/m 11/23/10
- Forex News Trading Canada Core CPI m/m 10/22/10
- Forex Trading Plan For Canada Core CPI m/m 06/22/10
- Forex News Trading Plan For CA Core CPI m/m 01/25/11
{ 2 comments… read them below or add one }
Today Core CPI is ACTUAL=FORECAST (0,1%) so what is it mean? do you think we should not to take position in our trading?
or just wait , the market to react or what?
I’ve been reading your blog for quite some time now. and i think its very helpful to me. I just want to say thank you for sharing your knowledge with us.
If the release doesn’t give you a reason to enter the market, why enter? We are looking for a reason so that our trade would work out, if there is no reason and you still enter, its called gambling, not trading.
Hope this helps.
Henry