Trading News Events

- U.S. Durable Goods Orders to Rebound 0.6.% in March.
- Non-Defense Capital Goods Orders ex Aircrafts to Climb 0.3% After Contracting -1.4% in February.

Trading the News: U.S. Durable Goods Orders

A 0.6% rebound in orders for U.S. Durable Goods may heighten the appeal of the greenback and spur a bearish retraction in EUR/USD as it raises the fundamental outlook for the world’s largest economy.

What’s Expected:

Why Is This Event Important:

Signs of a stronger recovery may encourage bets for a mid-2015 Fed rate hike, but the recent slew of weaker-than-expected data prints may encourage the central bank to further delay its normalization cycle in an effort to combat the ongoing slack in the real economy.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
U. of Michigan Confidence (APR P)	94.0	95.9
Average Hourly Earnings (YoY) (MAR)	2.0%	2.1%
Personal Spending (FEB)	0.3%	0.4%

Improved confidence paired with the uptick in wage growth may generate greater demand for large-ticket items, and a positive development may boost interest rate expectations as the Fed remains on course to remove the zero-interest rate policy (ZIRP).

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Consumer Price Index Core (YoY) (MAR)	1.7%	1.8%
Advance Retail Sales (MoM) (MAR)	1.1%	0.9%
Personal Spending (FEB)	0.2%	0.1%

However, fading discounts along with the ongoing weakness in household spending may drag on orders for durable goods, and a dismal print may dampen the appeal of the greenback as it raises the Fed’s scope to retain its current policy beyond mid-2015.

How To Trade This Event Risk

Bullish USD Trade: Orders Rebound 0.6% or Greater

• Need to see red, five-minute candle following the release to consider a short trade on EURUSD
• 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: Demand for Durable Goods Falter

• 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
EURUSD Daily Chart

• Long-term outlook for EUR/USD remains bearish, but the triangle/wedge formation may .
• Interim Resistance: 1.0970 (38.2% expansion) to 1.0990 (50% retracement)
• Interim Support: 1.0487 (3/13 close) to 1.0515 (50% expansion)

Impact that the U.S. Durable Goods report has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
FEB 2015	03/25/2015 13:30 GMT	0.2%	-1.4%	-9	-18

Orders for U.S. Durable Goods unexpectedly shrank 1.4% in February following a revised 1.9% expansion the month prior. The contraction was largely drive by a drop in transportation, with demand for non-defense aircrafts slipping 8.9% from the previous month. The slowdown in private-sector consumption may become a growing concern for the Fed as lower energy costs fail to boost household spending, and the central bank may look to further delay its normalization cycle in an effort to encourage a stronger recovery. Despite the weaker-than-expected prints, the initial market reaction was rather limited as EUR/USD struggled to hold above the 1.1000 handle during the North American trade to end the day at 1.0973.


--- Written by David Song, Currency Analyst and Shuyang Ren


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- 1Q U.K. GDP to Expand Annualized 2.6%- Slowest Pace of Growth Since 3Q 2013.
- Will the Bank of England’s (BoE) Inflation Report (May 13) Highlight a Slower Recovery?

Trading the News: U.K. Gross Domestic Product (GDP)

The U.K.’s 1Q Gross Domestic Product (GDP) report may dampen the appeal of the British Pound and undermine the near-term rebound in GBP/USD as the growth rate is expected to increase an annualized 2.6% after expanding 3.0% during the last three-months of 2014.

What’s Expected:

Why Is This Event Important:

Threats of a slower recovery may encourage the Bank of England (BoE) to adopt a more dovish tone while delivering its quarterly inflation report on May 13, and the central bank may look to further delay its normalization cycle in an effort to stem the downside risks surrounding the region.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Retail Sales ex Auto (MoM) (MAR)	0.5%	0.2%
Average Weekly Earnings inc Bonus (3MoY) (FEB)	1.8%	1.7%
Trade Balance (Pound) (FEB)	-1.5000B	-2.859B

Weakening demand from home and abroad may pave the way for a marked slowdown in the growth rate, and a dismal GDP print may trigger a near-term topping process in GBP/USD as market participants scale back bets for higher borrowing-costs in the U.K.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Employment Change (3Mo3M) (FEB)	170K	248K
Manufacturing Production (MoM) (FEB)	0.4%	0.4%
Purchasing Manager Index- Manufacturing s.a. (MAR)	54.4	54.4

Nevertheless, the ongoing improvement in the labor market paired with the rebound in business outputs may generate a positive development, and an unexpected pickup in GDP may spur a larger advance in British Pound as it boosts interest rate expectations.

How To Trade This Event Risk

Bearish GBP Trade: U.K. GDP Slows to Annualized 2.6% or Lower

• Need red, five-minute candle following the GDP print to consider a short British Pound trade
• If market reaction favors bearish sterling trade, short GBP/USD 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

Bullish GBP Trade: 1Q Growth Rate Exceeds Market Expectations

• Need green, five-minute candle to favor a long GBP/USD trade
• Implement same setup as the bearish British Pound trade, just in reverse

Potential Price Targets For The Release
GBP/USD Daily Chart

• Ongoing series of higher highs & lows favors a further advance in GBP/USD; could be at risk for a reversal as the RSI threatens the bearish momentum carried over from July 2014.
• Interim Resistance: 1.5340 (78.6% retracement) to 1.5350 (50% retracement)
• Interim Support: 1.5015 (50% expansion) to 1.5050 (50% retracement)

GBPUSD M5: 37 pips price movement by GBP - GDP news event :

The U.K. economy expanded at a slower-than-expected pace during the last three-months of 2014 as the growth rate climbed an annualized 2.7% following a 2.6% rise in the third-quarter. The lackluster recovery may encourage the Bank of England (BoE) to largely retain a wait-and-see approach in 2015, but we may see Governor Mark Carney continue to prepare U.K households and businesses for higher borrowing-costs as the central bank looks for a pickup in economic activity. The initial bearish reaction was short-lived as GBP/USD pushed above the 1.5100 handle ahead of the North America trade, with the pair ending the day at 1.5165.

--- Written by David Song, Currency Analyst and Shuyang Ren

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- Preliminary U.K. 4Q GDP to Expand an Annualized 2.5% Amid Lowest Print Since 4Q 2013.
- Private Consumption to Climb 0.7% - Fastest Pace of Growth Since 3Q 2014.

Trading the News: U.K. Gross Domestic Product (GDP)

An upward revision in the U.K. 1Q Gross Domestic Product (GDP) print may heighten the appeal of the British Pound and spur a near-term rebound in GBP/USD as signs of a stronger recovery raises the Bank of England’s (BoE) scope to normalize monetary policy sooner rather than later.

What’s Expected:

Why Is This Event Important:

A marked uptick in the growth rate may spur a growing dissent within the Monetary Policy Committee (MPC) as the central bank remains on course to normalize monetary policy, and we may see a greater number of BoE officials prepare U.K. households and business for higher borrowing-costs as the economy gets on a firmer footing.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Construction Output s.a. (YoY) (MAR)	1.1%	1.6%
ILO Unemployment Rate (3M) (MAR)	5.5%	5.5%
Industrial Production (MoM) (MAR)	0.0%	0.5%

The pickup in business outputs along with the ongoing improvement in the labor market may stoke a larger-than-expected upward revision in the growth rate, and a positive development may produce a bullish reaction in the sterling as it boosts interest rate expectations.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Trade Balance (MAR)	-2.400B	-2.817B
Mortgage Approvals (MAR)	62.5K	61.3K
Retail Sales inc. Auto Fuel (YoY) (MAR)	5.4%	4.2%

However, the widening trade deficit paired with the ongoing slack in private-sector activity may drag on the growth rate, and a dismal GDP figure may further delay the BoE’s normalization cycle especially on the back of the uncertainties clouding the outlook for fiscal policy.

How To Trade This Event Risk

Bullish GBP Trade: U.K. 1Q GDP Expands Annualized 2.5% or Greater

• Need to see green, five-minute candle following the GDP report to consider a long trade on GBP/USD.
• If market reaction favors a long sterling trade, buy GBP/USD with two separate position.
• Set stop at the near-by swing low/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 GBP Trade: Growth Rate, Personal Consumption Falls Short of Market Forecast

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in the opposite direction.

Potential Price Targets For The Release
GBP/USD Daily

• GBP/USD remains at risk for further weakness as price & the RSI fail to retain the bullish formation carried over from April;
• Interim Resistance: 1.5550 (61.8% expansion) 1.5570 (38.2% retracement)
• Interim Support: 1.5180 (23.6% retracement) to 1.5190 (50% retracement)

Impact that the U.K. GDP report has had on GBP/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
4Q P 2014	02/26/2015 09:30 GMT	2.7%	2.7%	+3	-123

The U.K. Gross Domestic Product (GDP) report was largely in-line with market expectation as the economy grew another annualized 2.7% during the last quarter of 2014. Even though the BoE remains on course to normalize monetary policy, the Bank of England (BoE) may retain its wait-and-see approach throughout 2015 as the ongoing slack in the real economy dampens the outlook for growth and inflation. The initial market reaction in the British Pound was short-lived, with GBPUSD sliding below the 1.5500 handle and ending the day at 1.5402.

--- Written by David Song, Currency Analyst and Shuyang Ren

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Originally Posted by TheNews

- Preliminary U.K. 4Q GDP to Expand an Annualized 2.5% Amid Lowest Print Since 4Q 2013.
- Private Consumption to Climb 0.7% - Fastest Pace of Growth Since 3Q 2014.

Trading the News: U.K. Gross Domestic Product (GDP)

...

This is price movement based on GBP - GDP for now:

- U.S. GDP Report to Show First Contraction in Growth Since 1Q 2014.
- Core Personal Consumption Expenditure (PCE) to Hold at Lowest Level Since 4Q 2010.

Trading the News: U.S. Gross Domestic Product (GDP)

A marked downward revision in the preliminary 1Q U.S. Gross Domestic Product (GDP) report may drag on the greenback and spur a near-term rebound in EUR/USD as the Federal Reserve looks to carry its zero-interest rate policy into the second-half of 2015.

What’s Expected:

Why Is This Event Important:

Even though the Fed pledges to look past the economic weakness drive by transitory factors, a larger-than-expected contraction in the growth rate may spur a further delay in the central bank’s normalization cycle as it undermines expectations for a stronger recovery.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Wholesale Trade Sales (MoM) (MAR)	0.5%	-0.2%
Trade Balance (MAR)	-$41.7B	-$51.4B
Advance Retail Sales (MoM) (MAR)	1.1%	0.9%

Waning demand from home and abroad may become a growing concern for the Fed amid the ongoing slack in the real economy, and a dismal GDP report may dampen the appeal of the greenback as it drags on interest rate expectations.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Consumer Credit (MAR)	$15.800B	$20.523B
Existing Home Sales (MAR)	3.1%	6.1%
Manufacturing Production (SIC) (MAR)	0.1%	0.1%

Nevertheless, increased business outputs paired with the expansion in private-sector credit may offer a better-than-expected GDP print, and prospects for a stronger recovery may spur a bullish reaction in the dollar as the Fed remains on course to remove the zero-interest rate policy (ZIRP) in 2015.

How To Trade This Event Risk

Bearish USD Trade: Growth Rate Contracts 0.9% or Greater

• Need to see green, five-minute candle following the GDP report to consider a long trade on EURUSD.
• If market reaction favors a short dollar trade, buy EURUSD with two separate position.
• Set stop at the near-by swing low/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.

Bullish USD Trade: 1Q GDP Report Exceeds Market Forecast

• Need red, five-minute candle to favor a short EURUSD trade.
• Implement same setup as the bearish dollar trade, just in reverse.

Potential Price Targets For The Release
EURUSD Daily

• Failure to preserve the near-term downward trending channel may generate a larger rebound in EUR/USD and spur a consolidation phase in the days ahead.
• Interim Resistance: 1.1180 (23.6% expansion) to 1.1210 (61.8% retracement)
• Interim Support: 1.0790 (50% expansion) to 1.0800 (23.6% expansion)

Impact that the U.S. GDP report has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
4Q P 2014	02/27/2015 13:30 GMT	2.0%	2.2%	+1	+47

4Q 2014 U.S. Gross Domestic Product (GDP)
EURUSD M5: 19 pips price movement by USD - GDP news event:

Even though the preliminary 4Q U.S. GDP print was revised down to an annualized 2.2% from an initial forecast of 2.6%, the print still managed to exceed market expectations for a 2.0% rate of growth. At the same time, Personal Consumption was also revised down to 4.2% from 4.3%, while the core Personal Consumption Expenditure (PCE) remained unchanged at 1.1% during the same period. The better-than-expected GDP reading may keep the Fed on course to normalize monetary policy in 2015 as the central bank anticipates a stronger recovery in the year ahead. The greenback strengthened following the report, with EUR/USD slipping below the 1.1200 handle to end the North American session at 1.1189.

--- Written by David Song, Currency Analyst and Shuyang Ren

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Originally Posted by TheNews

Trading the News: U.S. Gross Domestic Product (GDP)
...

EURUSD M5: 42 pips rangeprice movement by USD - GDP news event:

GBPUSD M5: 59 pips range price movement by USD - GDP news event:

USDCAD M5: 83 pips price movement by USD - GDP news event:

AUDUSD M5: 20 pips range price movement by USD - GDP news event:

- U.S. Advance Retail Sales to Rebound After Holding Flat in April.
- Household Spending Has Failed to Meet Market Forecast the Last Five Straight Prints.

Trading the News: U.S. Advance Retail Sales

A 1.2% rebound in U.S. Retail Sales may increase the appeal of the greenback and highlight a more bearish outlook for EUR/USD as the Fed remains on course to normalize monetary policy in 2015.

What’s Expected:

Why Is This Event Important:

Signs of a stronger recovery may encourage the Federal Open Market Committee (FOMC) to adopt a more hawkish tone at the June 17 interest rate decision, and expectations for higher borrowing-costs may spur a resumption of the long-term bullish USD trend as the central bank moves away from its easing cycle.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Consumer Credit (APR)	$16.000B	$20.541B
Average Hourly Earnings (YoY) (MAY)	2.2%	2.3%
Non-Farm Payrolls (MAY)	226K	280K

The pickup in job/wage growth along with the ongoing expansion in private-sector credit may encourage a marked rebound in household consumption, and an upbeat print may trigger a bullish reaction in the greenback as it boosts interest rate expectations.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Consumer Price Index ex Food & Energy (YoY) (APR)	1.7%	1.8%
Personal Consumption (1Q P)	2.0%	1.8%
U. of Michigan Confidence (MAY P)	95.9	88.6

Nevertheless, retail sales may continue to disappoint amid easing discounts paired with waning consumer confidence, and another weaker-than-expected report may drag on the dollar as it raises the for a further delay in the Fed’s normalization cycle.

How To Trade This Event Risk

Bullish USD Trade: U.S. Retail Sales Rebounds 1.2% or Greater

• Need red, five-minute candle following a positive print to consider a short EUR/USD trade.
• If market reaction favors a bullish dollar trade, sell EUR/USD 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: Household Spending Continues to Disappoint

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same setup as the bullish dollar trade, just in reverse.

Potential Price Targets For The Release
EURUSD Daily

• EUR/USD appears to be stuck in a long-term wedge/triangle formation following the failed attempt to test the February high back in May; remains at risk for range-bound prices as market participants weigh the outlook for monetary policy.
• Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
• Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)

Impact that the U.S. Retail Sales report has had on EUR/USD during the previous month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
APR 2014	05/13/2014 12:30 GMT	0.2%	0.0%	+52	+86

U.S. Retail Sales unexpectedly held flat in April following a revised 1.1% advance the month prior. A deeper look at the report showed a 2.2% decline in department stores sales, which was accompanied by a 0.7% decline in gasoline receipts, while discretionary spending on clothing increased another 0.2% after climbing 0.9% in March. The ongoing in private-sector consumption dragged on the greenback, with EURUSD clearing the 1.1300 handle to end the North American trade at 1.1353.

--- Written by David Song, Currency Analyst and Shuyang Ren


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Originally Posted by TheNews

- U.S. Advance Retail Sales to Rebound After Holding Flat in April.
- Household Spending Has Failed to Meet Market Forecast the Last Five Straight Prints.

Trading the News: U.S. Advance Retail Sales

EURUSD M5: 87 pips price movement by USD - Retail Sales news event:

USDCAD M5: 76 pips price movement by USD - Retail Sales news event:

AUDUSD M5: 63 pips price movement by USD - Retail Sales news event:

- Headline U.K. Consumer Price Index (CPI) to Rise for Second Time in 2015.
- Core Rate of Inflation to Pick Up for First Time Since December 2014.

Trading the News: U.K. Consumer Price Index

An uptick in the headline & core U.K. Consumer Price Index (CPI) may spur fresh monthly highs in GBP/USD as it raises the Bank of England’s (BoE) scope to remove the record-low interest rate sooner rather than later.

What’s Expected:

Why Is This Event Important:

BoE Governor Mark Carney may sound increasingly hawkish over the coming months as the central bank head anticipates stronger price growth in the second-half of 2015, and we may see a growing number of Monetary Policy Committee (MPC) officials prepare U.K. households & businesses for higher borrowing-costs as the economy gets on a firmer footing.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Net Consumer Credit (APR)	1.0B	1.2B
Retail Sales inc. Auto Fuel (APR)	0.4%	1.2%
Average Weekly Earnings ex. Bonus (3MoY) (MAR)	2.1%	2.2%

U.K. firms may boost consumer prices amid stronger wage growth along with the expansion in private-sector credit, and a strong inflation report may instill a more bullish outlook for the sterling as the BoE remains on course to normalize monetary policy.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
BRC Shop Price Index (YoY) (MAY)	-1.8%	-1.9%
GfK Consumer Confidence (MAY)	4	1
Producer Price Index n.s.a. (YoY) (APR)	-1.6%	-1.7%

However, waning confidence paired with falling input costs may continue to drag on price growth, and a dismal CPI print may undermine the near-term breakout in GBP/USD as market participants push back bets for a BoE rate hike.

How To Trade This Event Risk

Bullish GBP Trade: U.K. Headline & Core Inflation Upticks in May

• Need green, five-minute candle following the release to consider a long British Pound trade.
• If market reaction favors bullish sterling trade, long GBP/USD with two separate position.
• Set stop at the near-by swing low/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 GBP Trade: Consumer Prices Fall Short of Market Forecast

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in the opposite direction.

Potential Price Targets For The Release
GBPUSD Daily

• GBP/USD may continue to retrace the decline from May as it breaks out of the triangle/wedge formation carried over from the previous month, with the pair showing a net 2015-gain for the first time since May 22.
• DailyFX Speculative Sentiment Index (SSI) shows the retail crowd has flipped net-short GBP/USD coming into the third-week of June, with the ratio currently holding at -1.00.
• Interim Resistance: 1.5780 (38.2% retracement) to 1.5814 (May high)
• Interim Support: 1.5400 handle to 1.5420 (78.6% expansion)

Impact that the U.K. Core CPI report has had on GBP during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
APR 2015	05/19/2015 08:30 GMT	1.0%	0.8%	-43	-62

The U.K. Consumer Price Index (CPI) contracted for the first time since 1960 as price growth slipped an annualized 0.1% in April, while the core rate of inflation slowed to a 9-year low of 0.8% after expanding 1.0% the month prior. The low-inflationary environment runs the risk of seeing a further delay in the Bank of England’s (BoE), but it seems as though the central bank will largely stay on course to normalize monetary policy over the near to medium-term as the board anticipates a stronger recovery later this year. The initial market reaction was limited and short lived, with GBP/USD dipping below 1.5550 to end the day at 1.5510.

--- Written by David Song, Currency Analyst and Shuyang Ren


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Originally Posted by TheNews

Trading the News: U.K. Consumer Price Index

GBPUSD M5: 68 pips price movement by GBP - CPI news event :