if actual > forecast (or actual data) = good for currency (for USD in our case)
[USD - Industrial Production] = Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. It's a leading indicator of economic health - production reacts quickly
to ups and downs in the business cycle and is correlated with consumer
conditions such as employment levels and earnings.
U.S. Industrial Production Unexpectedly Edges Down 0.1% In August
With manufacturing output falling for the first time since January,
the Federal Reserve released a report on Monday showing that U.S.
industrial production unexpectedly decreased in the month of August.
report said industrial production edged down by 0.1 percent in August
after inching up by a downwardly revised 0.2 percent in July.
modest drop came as a surprise to economists, who had expected
production to climb by 0.3 percent compared to the 0.4 percent increase
originally reported for the previous month.
The unexpected drop in
industrial production came as manufacturing output fell by 0.4 percent
in August after rising by 0.7 percent in July.
The Fed noted that
the production of motor vehicles and parts tumbled by 7.6 percent in
August after jumping by more than 9 percent in July.
Meanwhile, the report also said mining output rose by 0.5 percent in August after dipping by 0.3 percent in the previous month.
output also surged up by 1.0 percent in August after plunging by 2.7
percent and 2.0 percent in July and June, respectively.
if actual > forecast (or actual data) = good for currency (for EUR in our case)
[EUR - German ZEW Economic Sentiment] = Level of a diffusion index based on surveyed German institutional investors and analysts. It's a leading indicator of economic health - investors and analysts are
highly informed by virtue of their job, and changes in their sentiment
can be an early signal of future economic activity
German ZEW Investor Confidence Eases Less Than Expected
Germany's investor confidence weakened less-than-expected in
September, reports said Tuesday citing data from the Centre for European
The ZEW economic sentiment index fell to
6.9, which was above economists' forecast for a score of 5. In August,
the index reading was 8.6.
The current conditions index of the
survey, meanwhile, tumbled to 25.4, which was well below the consensus
expectation of 40. In August, the reading was 44.3.
The Eurozone economic sentiment index of the survey eased to 14.2 in September. In August, the reading was 23.7.
EURUSD Technical Analysis: Short at 1.3644 (based on dailyfx article)
A daily close above the 14.6% Fibonacci retracementat
1.2981 exposes the 23.6% level at 1.3057. Alternatively, a turn below
the 50% Fib expansion at 1.2864 opens the door for a test of the 61.8%
threshold at 1.2794.
Trading the News: Federal Open Market Committee (FOMC) Interest Rate Decision (based on dailyfx article)
The Federal Open Market Committee (FOMC) interest rate decision may spur
a bearish reaction in the dollar (bullish EUR/USD) if the central bank
remains reluctant to move away from the zero-interest rate policy
What’s Expected:Why Is This Event Important:
Even though the Fed is widely expected to conclude its asset-purchase
program at the October 29 meeting, we would need a more hawkish twist to
the forward-guidance for monetary policy to favor further USD strength.
The dollar may come under pressure should we get more of the same from
the Fed, and the greenback may face a larger correction over the
remainder of the month should Chair Janet Yellen see greater scope to
retain the highly accommodative policy stance for an extended period of
time.Nevertheless, sticky inflation paired with the uptick in wage growth may
spur a greater dissent within the committee and push the FOMC to lay
out a more detailed exit strategy as the central bank looks to move away
from its easing cycle.
How To Trade This Event Risk
Bearish USD Trade: FOMC Remains Reluctant to Normalize Monetary Policy
[USD - CPI] = Change in the price of goods and services purchased by consumers. Consumer prices account for a majority of overall inflation. Inflation
is important to currency valuation because rising prices lead the
central bank to raise interest rates out of respect for their inflation
With a substantial decrease in energy prices more than offsetting
higher prices for food and shelter, the Labor Department released a
report on Wednesday showing an unexpected drop in U.S. consumer prices
in the month of August.
The Labor Department said its consumer
price index dipped by 0.2 percent in August after inching up by 0.1
percent in July. The modest drop came as a surprise to economists, who
had expected consumer prices to come in unchanged.
AUDIO - Currencies with David Warner
A former Broker at FXCM, David Warner is now teaching Forex
classes for Online Trading Academy. Coming from a traditional investment
background, David shares some of the major things he has learned over
the years with Power Trading Radio listeners. Later Merlin and
David take a look at a couple currency pairs for potential trading
opportunities and suggestions on how to trade economic data releases.
EUR/USD Vulnerable to Hawkish Fed- Outlook May Hinge on T-LTRO (based on dailyfx yotube channel)
The EUR/USD may look beyond the FOMC policy meeting to break out of the rate as the ECB implements the targeted long-term refinancing operation (T-LTRO).=============2014-09-18 09:15 GMT (or 11:15 MQ MT5 time) | [EUR - Targeted LTRO]
[EUR - Targeted LTRO] = Total value of money the ECB will create and use to loan to Eurozone banks. It provides liquidity to banks which usually leads to lower long-term interest rates and stimulates growth.
LTRO = Long Term Refinancing Option
MetaTrader Trading Platform Screenshots
EURUSD, M5, 2014.09.18
MetaQuotes Software Corp., MetaTrader 5, Demo
EURUSD Technical Analysis (based on dailyfx article)
The Euro may correct higher against the US Dollar
after forming a bullish Piercing Line candle pattern coupled with
positive RSI divergence. A daily close above trend line resistance at
1.2951 exposes the September 16 high at 1.2994. Alternatively, reversal
below above the 1.2858-71 area marked by the September 9 low and the
14.6% Fibonacci expansion opens the door for a test of the 23.6% level