June 20, 2012

We’ll be getting the quarterly release of New Zealand’s GDP, and because it is a quarterly release, market tends to pay more attention to it, thus more volatility is expected. Here’s forecast:
5:45pm NZ GDP q/q Forecast 0.4% Previous 0.3%
DEVIATION: 0.3% (BUY NZD 0.7% / SELL NZD 0.1%)

Definition“Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation’s currency. GDP is the broadest measure of activity and the primary gauge of the economy’s health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation’s currency.”

The Trade PlanThe expected consensus number is 0.4%, and the safe deviation is 0.3%, in the event it is hit, we should see market move 40 pips within the hour.
We’ll be looking to BUY the NZD if the release is at 0.7% or better, or we’ll SELL NZD is the release is 0.1% or worse. We’ll be using our standard after-news retracement trading method.

Recommended Pairs : NZDUSD, NZDCHF

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