U.S. Consumer Price Index Expected to Rise 1.5% in December - Trading Systems

Sergey Golubev 2014.01.16 13:37 #781

Forum on trading, automated trading systems and testing trading strategies

newdigital, 2014.01.16 11:04

Trading the News: U.S. Consumer Price Index (adapted from dailyfx article)

U.S. Consumer Prices are projected to increase an annualized 1.5% in December, which would mark the first advance since July, and a pickup in price growth may encourage the Federal Open Market Committee (FOMC) to further reduce its asset-purchase program as it dampens the threat for disinflation.

What’s Expected:

Time of release: 01/16/2014 13:30 GMT, 8:30 EST
Primary Pair Impact: EURUSD
Expected: 1.5%
Previous: 1.2%
Forecast: 1.4% to 1.6%

Why Is This Event Important:

A pickup in price growth may spur a further shift in the policy outlook as the Fed anticipates a more robust recovery in 2014, and the central bank may take a more aggressive approach in moving away from its easing cycle as the outlook for growth and inflation improves.

How To Trade This Event Risk

Bullish USD Trade: Consumer Prices Increased 1.7% or Greater

Need red, five-minute candle following the CPI print to consider a short EURUSD trade
If market reaction favors a long dollar trade, sell EURUSD with two separate position
Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
Move stop to entry on remaining position once initial target is hit; set reasonable limit

Bearish USD Trade: Price Growth Remains Subdued

Need green, five-minute candle to favor a long EURUSD trade
Implement same setup as the bullish dollar trade, just in the opposite direction

Potential Price Targets For The Release

String of Failed Closes Above 1.3800 Favors Downward Trend Dating Back to 2008
RSI Highlights Further EURUSD Weakness as Bearish Divergence Takes Shape
Interim Resistance: 1.3800 (100.0 expansion) to 1.3830 (61.8 retracement)
Interim Support: 1.3530 (61.8 expansion) to 1.3570 (23.6 retracement)

Trading CPI

On the image - buy position with stop loss on breakeven :

Press review XAUUSD Technical Analysis 15.12 EURUSD Technical Analysis 05.01

Sergey Golubev 2014.01.17 10:04 #782

Forum on trading, automated trading systems and testing trading strategies

Press review

newdigital, 2014.01.17 08:08

Trading the News: U.K. Retail Sales (based on this article)

Household spending in the U.K. is expected to increase another 0.3% during the month of December, and a positive print may push the GBPUSD back towards the 1.6600 handle as the stronger recovery raises the Bank of England’s (BoE) scope to normalize monetary policy ahead of schedule.

What’s Expected:

Time of release: 01/17/2013 9:30 GMT, 4:30 EST
Primary Pair Impact: GBPUSD
Expected: 0.3%
Previous: 0.4%
Forecast: 0.3% to 0.4%

Why Is This Event Important:

A pickup in private consumption may encourage BoE Governor Mark Carney to adopt a more hawkish tone for monetary policy, and the central bank may show a greater willingness to lift the benchmark interest rate later this year amid the growing threat for a housing bubble.

How To Trade This Event Risk

Bullish GBP Trade: Retail Sales Climbs 0.3% or Greater

Need green, five-minute candle following the statement to favor a long GBP trade
If reaction favors buying British Pound, long GBPUSD with two separate position
Set stop at the near-by swing low/reasonable distance from entry; need at least 1:1 risk-to-reward
Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bearish GBP Trade: Household Spending Disappoints

Need red, five-minute candle to consider a short GBPUSD trade
Implement same setup as the bullish British Pound trade, just in the opposite direction

November 2013 U.K. Retail Sales :

Market Condition Evaluation based on standard indicators in Metatrader 5 - page 79