Forex News Trading UK GDP q/q 01/25/12

UK quarterly GDP release is always a high impact report. With this being the Prelim release, or the first release of three, we are likely to see more market participation. Here is the forecast number:

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4:30am (NY Time) UK Revised GDP q/q Forecast -0.1% Previous 0.6%
ACTION: GBP/USD BUY 0.2% SELL -0.4%

The Trade Plan
Our deviation for today’s trade is 0.3% to SELL and 0.3% to BUY. We’ll look to possibly SELL GBP/USD at -0.4% of release figure or worse; BUY GBP/USD at 0.2% of release figure or better. Depending on the surprise of this release, we could go from after news retracement trade to spike trading. I believe if we get a 0.8% or better release, it justifies spiking trading to buy GBPUSD immediately. If we get -0.1%or worse, then it is also justified to SELL GBPUSD on a spike trade.

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The Market
Recent revision for Q3 Final GDP out of UK puts the 3rd quarter at +0.6%, but since then we’ve seen significant deterioration in UK economy and today will be the first time for us to get the official story.  With inflationary pressure finally showing signs of moderation, today’s release may increase speculation that BOE might be ready to add more stimulus as UK risks falling back to a double dip recession.

Additional Thoughts
I’d be possibly inclined to jump in as a spike trade if we get a strong surprise either way, I believe market will remain driven by this release for an extended period of time, possibly extending the move through the end of the week, or end of the year even.

Pre-news Consideration
There is no pre-news consideration for this release today. But due to the uncertainty of it all, I would probably be more inclined to a SELL on rally.

Definition
GDP is defined 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 is the basically direct measure of the economy’s health, and a stronger GDP means that the central bank will more likely to raise interest to curb inflation.

 

Thanks,

 

Forex News Trading UK Prelim GDP q/q 07/26/11 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.

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