This is a little bit long but I wanted to spend some time explaining what exactly this report means and why It affects the market the way it does. If you are only interested in the call you can skip down to the bottom.
OUR NEXT LIVE ON THE NEWS TRADECALL
Tomorrow we have US Durable Goods coming out at 8:30 am eastern. There are two components to this release.
LETS TAKE A CLOSER LOOK
The First component is the Durable Goods which is officially known as the Advanced Durable Goods and Manufacturing. This measure the orders placed as well as the shipments of orders placed in dollar volume.
The second part of this is the Durable Goods Ex Transportation which simply excludes defense and Transportation items due to there volatility. This is the number we will focus on.
The Durable Goods Ex Transportation is expected at 1.0%. A higher than expected number will strengthen the US dollar. A higher number indicates that demand for US durable goods is increasing.
An increase in demand for US goods will probably result in rising production which will increase employment figures. When employment figures go up so does consumer spending. A lower than expected number would have the opposite affect.
So if the number comes out higher than expected that will signal a sell on the GBP/USD. If the number comes out lower than expected than it will signal a buy on the GBP/USD.
THE ENTRY INFO
As I said the expected number is 1.0%. I would like to see around 1.5% in deviation in order to trade this release. What this means is if the number comes out at 2.5% I will take a position short and if the number comes out at -1.5% I will take a position long.
This release commonly has revisions so keep an eye out for that as well. The revisions work much like the actual release triggers work. If the revised number is higher than reported than this will affect the US dollar positively resulting in downward pressure on the GBP/USD.
If there is a revision I will exit if it conflicts with the initial entry direction assuming that it conflicts by more than half of the trigger. Meaning anything .8 or higher.
If this hits my triggers I would expect around 20 to 30 Pips. Just to clarify I am concetrating on the ex trans. number
Good Luck trading!!!
