Forex News Trading For US Core CPI 02/17/12

We´ll be trading US Core CPI m/m release tomorrow. CPI or Consumer Price Index, also known as the “true cost of living”, is what drives Central Banks to raise/cut interest rate, therefore this release will be widely watched. Here´s the forecast for the CPI:


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8:30am (NY Time) US Core CPI m/m Forecast 0.3% Previous 0.1%

The Trade Plan
Our minimum tradable deviation for this release is 0.2%; if the release number (core) increases to a minimum 0.5% then we will BUY USD/CHF. If the CPI number decreases to -0.1% or less, we´ll SELL USD/JPY. Historically even at a difference of 0.1%, market is likely to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips within the next 90 minutes or so.

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We´ll be trading this release using our after news retracement trade method.

For more information on my trading methods:

The Market
With Thursday’s PPI showing a slight drop in inflationary pressure (0.1% vs 0.3%), we’ll probably get similar results today… although there should be very little attention paid to this release as the market is not really expecting the FOMC to act solely on inflation pressure; however, if we get a big enough surprise, we could see some market reaction for sure.

Additional Thoughts
With Fed’s mandate on both Unemployment and Inflation, today’s CPI may not be enough to change Fed’s view on their monetary policy, therefore I believe the effect may be short-lived.

Pre-News Consideration
No Pre-news for this release.

“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”.


Forex News For US Core CPI m/m September 15, 2011 henry sig

About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

You can find more information about me on my Google Profile.

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