US Core CPI is expected to rise only around the 0.2% again this month but with tensions in the geopolitical arena and risk aversion seems to be the only thing on the minds of traders, it is going to be tough to find support for the USD regardless of today’s reading. However, with that being said, I would definitely jump in if we get our tradable deviation in the direction of the reading, and my plan is to get in and out and stay mostly against the USD because the overall trend still remains unchanged.
8:30am (NY Time) US Core CPI m/m Forecast 0.2% Previous 0.1%
DEVIATION: 0.2% (BUY USD 0.4% / SELL USD 0.0%)
The Trade Plan
Our minimum tradable deviation for this release is 0.2%; if the release number (core) decreases to a minimum 0.0% then we will SELL USD; if the core release is 0.4%, we’ll BUY USD. Historically even at a difference of 0.1%, market is likely to exaggerate its move, therefore if our tradable release is hit, there is about 80% of chance market will move 50 pips within the next 90 minutes or so. Once again, we are going to focus on the Core figure, or CPI EX Food and Energy, not the headline CPI.
We´ll be trading this release using our after news retracement trade method.
For more information on my trading methods: http://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: EURUSD.
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
“US Core 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”.
Source: New feed 2