Because this is the first quarterly release for the second quarter of 2016, we are likely to see plenty of market reaction, but since we are expect no sudden moves with the Fed, today’s release will probably not change any long-term expectations much, but we’ll still be looking forward to trade if we get our tradable deviation…
Here is the forecast for the US Adv. GDP q/q (Q2 2016)
8:30am (NY Time) US Advanced GDP q/q Forecast 2.6 Previous 1.1% (Final Q1 GDP)
DEVIATION: 0.2% (BUY USD 2.8% / SELL USD 2.4%)
The Trade Plan
We are looking for a deviation between 0.2% ~ 0.3% from the forecasted figure of 2.6%. Therefore if we get a 2.8% on the second quarter (Q2) 2016 GDP, it would be US Dollar positive. We will BUY USD. However, if we get a 2.4% release or worse, then we would be SELLING USD. We’ll be looking to trade this release based on my Retracement Trading Method; since this is a high impact release, strong market volatility is expected immediately after the release.
I’d recommend to use the Recommended Pair above as it is based on my strength meter by pairing up the best currencies in the event of a better/worse news… or you can just use the default pairs for this news: USDJPY or EURUSD
We’ll be trading this release using an after-news retracement method. For more information on my trading methods, please read:
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.
“GDP, which is defined (from wikipedia) 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 number has a direct effect on the Interest rate of the currency, it is one of the news indicators that affects FOMC’s decision directly.”