Written by dustin pass
Thursday, October 28th, 2010
TRADE CALL RECAP
For our last live trade call, we were watching the US Durable Goods report yesterday morning. We recommended raising our safe trigger for this release, so we were looking to sell the EURJPY if the number came out at least 3.0% worse than expected. The actual number came out only 1.3% worse than expected, so it did not meet our safe triggers.
OUR NEXT LIVE ON THE NEWS TRADE CALLS
We will have two opportunities for a trade tomorrow when both the Canadian GDP and the US GDP reports are released at 8:30 am EDT (12:30 pm GMT). If you are only able to focus on one of the trades, we recommend trading the US GDP as this is a quarterly Advanced number, which typically has more of an impact on the market.
For the US GDP report, the expectation is currently 2.1%. We will focus on the EURJPY for this trade, and a larger than expected number will trigger a buy on the EURJPY.
We will likely prefer to see a buy trigger on this release as the EURJPY is currently in an uptrend. We could expect to see a 25-50 pip move on a safe trigger. We will likely set the safe trigger to 0.5% as this is an Advanced GDP number which typically has more of an impact on the market than the other quaterly numbers.
This report has met our safe trigger in four out of the last twelve months, and the EURJPY has moved approximately 20-75 pips each time. This report last met our safe trigger in January, and we had traders report profits of up to 35 pips on the EURJPY. The chart for the EURJPY at the time of January’s release is below.
The video of January’s trade is below.
httpv://www.youtube.com/watch?v=CVXzmo85Vdw
For the Canadian GDP report, the expectation is 0.3% and we will most likely set our deviation to at least 0.3% to trigger a safe trade. A higher than expected number would be good for the CAD, and signal a sell on the USDCAD and EURCAD. We could expect a 20-30 pip move on the EURCAD if it meets our safe trigger.
This release can be an interesting one as the Canadian GDP is the broadest measure of economic health in Canada. Our focus for this particular release will be on the EURCAD as the other US data could impact the USDCAD. We will most likely prefer a buy trigger on this release as that could have a bigger impact on the market. However, this release has not moved very well the last few times it has met our safe triggers, so you will want to use extra caution on this release if you decide to trade it.
This report met our safe trigger three times last year, causing the EURCAD to move between 10-25 pips each time. This report last met our safe trigger in September of 2009, and the EURCAD did not react very well to the deviation. Most traders reported getting out at breakeven or taking a small loss on the trade. However, there was a very good move in February and June with just a 0.2% deviation because of strong agreement with some other data. Below is a chart for the EURCAD at the time of last September’s release:
A video of last September’s trade is below:
httpv://www.youtube.com/watch?v=0GFcVxHK_U0
This is our current outlook for these trade opportunities; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Live Trade Room 15 minutes prior to the releases to get my commentary on these trades.
Good Luck!!!!
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