[flv:http://www.newsprofiteer.com/091609-uscorecpi/091609-uscorecpi.mp4 480 360]
8:30am (NY Time) US Core CPI m/m Forecast 0.1% Previous 0.1%
ACTION: USD/JPY BUY 0.3% SELL -0.1%
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”.
Our surprise factor is 0.2%, if the CPI number (core) increases to a surprise at 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 different of 0.1% the market tends to overreact. If it does hit our tradable release, there is about 80% of chance market will move 50 pips.
Since US CPI is a global matter, an unexpected increase will probably be considered as risk appetite whereas an unexpected decrease will probably be considered as risk aversion. Although I will use the USD/JPY pair a the gauge for risk sentiment, I might look to EUR/JPY to execute my trade.
UPDATE: Release came out as expected and we didn’t see much of immediate reaction… However, due to the 3-sessions rule and the market cycle theory, I decided to call a trade on USD/CAD and picked up 30+ pips in about 1 hour… most of my trade room people who got in at the official entry and exits ended up with 60+ pips of gain… Watch this video and see how I was able to “sniff” the best pair to trade and spot the best opportunity…
Related posts:
- US Core CPI m/m 11/18/09
- US CPI m/m 10/15/09
- Canada Core CPI m/m 09/17/09
- Canada Core CPI m/m 07/17/09
- Canada Core CPI m/m 10/16/09
- Canada Core CPI m/m 11/18/09
- Canada Core CPI m/m 08/19/09
- Forex Trade Plan For CA Core CPI m/m 08/20/10
- Forex News Trading Plan For CA Core CPI m/m 01/25/11
- Forex Trading Plan For Canada Core CPI m/m 06/22/10
