8:30am (NY Time) US Durable Goods Orders Forecast 0.1% Previous 1.1%
ACTION: USD/JPY BUY 1.9% SELL -1.7%
Durable Goods calculates purchase orders of goods that have a life-expectancy of 3 years or more, instead of goods that are being used up all at once. Examples of durable goods are cars, appliances, business equipments, etc… Core Durable goods is a derivative of Durable goods that excludes Transportation element, which is a better indication of the nation’s economic status, since transportation elements fluctuate from months to months. Forex traders watch this report closely because a strong number shows a healthy outcome for the economy.
Our focus will be on the Core Durable Goods, or Durable Goods Ex. it is what most bankers focus on. This report has been losing its impact since the beginning of the year, and the actual release number must be a huge surprise for the market to react. If the deviation is over 1.8% higher, then I would look to BUY USD/JPY, if the deviation is 1.8% lower, then I would look to SELL USD/JPY. Remember the idea is to get a surprise number, if the number is very close to release price, then there is no trade whatsoever.
One important correlation to be aware of is the Housing data for the month of June; since Durable Goods Data is closely associated with home sales, we could be looking at a higher than expected release number.
UPDATED: Durable Goods number came out much worse than expectation at -2.5%, but the Core Durable Goods was actually positive 1.1%. The Core Durable Goods is a derivative of the headline number minus the transportation factor, which varies from season to season. Traders focus on the Core, also known as Durable Goods EX. Transportation, because it is a more accurate reflection of the market. Upon verifying that the Core and Headline are in conflict, I decided that there are no valid reason (newswise) for this trade.
[flv:http://www.newsprofiteer.com/072909-usdurablegoods/072909-usdurablegoods.mp4 480 360]
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{ 3 comments… read them below or add one }
I was really glad.I combined my technicals with your insight on durable goods.It was a fine trade.It raked in 50 pips on GBP/USD.
Thanks
Hello Henry,
I really apppreciate your market insight.I intend trading the core durable goods orders.I would post my results later.I would like to compare it with yours.
Once again,Thanks.
I think this news not have much impact for the market. I hope you can open live room trading for us, so we can put together as like as your order the crazy market, because your insting is very good that i can learn on your video. Thx hen