JamesThatcher
Well-known member
What does the data mean to the market?
The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.
There are 4 lines of data.
CPI - Core (M/M) - Headline
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)
Historic deviations and their outcome
April 13 2021 Minor deviations created a nice spike but no continuation. Therefore it provided a minimal opportunity and no trade for me.
See Chart here:
calendar.galaxysoftwareinc.com
March 10 2021 The headline and secondary line Core CPI Y/Y and M/M both deviated by 0.1, giving a nice 15 pip move on USDJPY. That's an excellent move for such a slight deviation, which shows how hot this data is becoming.
See Chart here:
calendar.galaxysoftwareinc.com
February 10 2021 Check out last months 0.2 deviation; bear in mind that I expect the same deviations to create a better reaction today!
We can see a small but gradual move over the first one minute with continuation two or three minutes after the initial move.
See Chart here:
calendar.galaxysoftwareinc.com
I will use forecasts of:
CPI - Core (M/M) 0.3
CPI - Core (Y/Y) 2.3
CPI (M/M) 0.2
CPI (Y/Y) 3.6
Today's trade plan
The focus is on CPI - Core (M/M) - Headline.
Today I want a Deviation of 0.2% or greater in either direction from the forecast of 0.2% to take a trade.
So, an actual figure of 0.1% to Sells on USD pairs or 0.5% to Buy USD pairs.
I will look to confirm that all others line deviates in the same direction, I will not accept a conflict on any of the other three lines!
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)
If they all lineup, we should bank some good pips today.
Tradable pairs
USDJPY
Hope this helps but please do your own analysis!!
Good luck!!
James Thatcher
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.
There are 4 lines of data.
CPI - Core (M/M) - Headline
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)
Historic deviations and their outcome
April 13 2021 Minor deviations created a nice spike but no continuation. Therefore it provided a minimal opportunity and no trade for me.
See Chart here:
Galaxy Economic Calendar
calendar.galaxysoftwareinc.com
March 10 2021 The headline and secondary line Core CPI Y/Y and M/M both deviated by 0.1, giving a nice 15 pip move on USDJPY. That's an excellent move for such a slight deviation, which shows how hot this data is becoming.
See Chart here:
Galaxy Economic Calendar
calendar.galaxysoftwareinc.com
February 10 2021 Check out last months 0.2 deviation; bear in mind that I expect the same deviations to create a better reaction today!
We can see a small but gradual move over the first one minute with continuation two or three minutes after the initial move.
See Chart here:
Galaxy Economic Calendar
calendar.galaxysoftwareinc.com
I will use forecasts of:
CPI - Core (M/M) 0.3
CPI - Core (Y/Y) 2.3
CPI (M/M) 0.2
CPI (Y/Y) 3.6
Today's trade plan
The focus is on CPI - Core (M/M) - Headline.
Today I want a Deviation of 0.2% or greater in either direction from the forecast of 0.2% to take a trade.
So, an actual figure of 0.1% to Sells on USD pairs or 0.5% to Buy USD pairs.
I will look to confirm that all others line deviates in the same direction, I will not accept a conflict on any of the other three lines!
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)
If they all lineup, we should bank some good pips today.
Tradable pairs
USDJPY
Hope this helps but please do your own analysis!!
Good luck!!
James Thatcher
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.