8:30am (NY Time) US ADV GDP q/q Forecast 4.5% Previous 2.2%
ACTION: USD/JPY USD/CHF BUY 4.8% SELL 4.2%
Our main focus tomorrow will be on the fourth quarterly (Q4) release of U.S. Advanced GDP number. Analysts are split with their expectations on this release as it could go either way. We are looking for a minimum deviation of 0.3% on the forecasted figure of 4.5%. Therefore if we get a 4.8% on the advanced 4th quarter GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 4.2% release, then we would be SELLING USD/JPY. With USD being regarded as safe-haven currency, if we get a worse than expected number, we might still see USD getting stronger as traders scramble to BUY US Treasuries, making USD stronger than most european currencies such as Euro and Sterling, especially in this risk aversion driven market.
With Adv. GDP being the first GDP release of the three, it is usually the most volatile GDP release with the highest potential of a surprise number. Because the impact of GDP on future monetary policy, this event has the potential of changing both the long-term and short-term trend of USD. It’s definitely an event worth trading.
DEFINITION:
“GDP, which is defined (from wikipedia) as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP number has a direct effect on the Interest rate of the currency, it is one of the news indicators that affects FOMC’s decision directly.”
Related posts:
- US ISM Non-Manufacturing PMI 11/04/09
- Libor Rate Decision 09/17/09
- US NFP (Nonfarm Payroll) Employment Changes 12/04/09
- US New Home Sales m/m 11/25/09
- US ISM Manufacturing PMI 11/02/09
- Open letter concerning Sterling’s Reversal – (copied from my newsletter)
- US ISM Manufacturing PMI m/m 12/01/09
- US Core Retail Sales m/m 09/15/09
- US Core Retail Sales m/m 10/14/09
- US Core CPI m/m 11/18/09
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Only two minuutes on USDJPY for 13200 dolar, thanks alot for your info!!! Buy at 90.45 and TP 90.75.
I really enjoy your new trade posts, and friday was defiantly another great oppurtunity to make many pips. However the USD/JPY failed to make another significent moves and even fell back down, whereas the other currencies since as AUD, EUR, GBP pairs made significent moves. I would really like to hear your opinion on the cause of this.
Regards
JPY is highly correlated with the Equity market, with Equity market on the decline globally, traders are looking to sell into any rally. This is something that I’ve explained live in the traderoom, where I told traders to prepare and sell both GBP/JPY and EUR/JPY at the top… and they both dropped 200 pips after my analysis.