June 14, 2012

We´ll be trading US Core CPI m/m release tomorrow. CPI or Consumer Price Index, also known as the “true cost of living”, is what drives Central Banks to raise/cut interest rate, therefore this release will be widely watched. Here´s the forecast for the CPI:
8:30am (NY Time) US Core CPI m/m Forecast 0.2% Previous 0.2%
DEVIATION: 0.2% (BUY USD 0.4% / SELL USD 0.0%

DEFINITION:“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).” It is also known as the “True Cost of Living”.

The Trade PlanOur minimum tradable deviation for this release is 0.2%; if the release number (core) decreases to a minimum 0.0% then we will SELL USD; if the core release is 0.4%, we’ll BUY USD. Historically even at a difference of 0.1%, market is likely to exaggerate its move, therefore if our tradable release is hit, there is about 80% of chance market will move 50 pips within the next 90 minutes or so.

Recommended Pairs : EURUSD , GBPUSD

EURUSD
Resistances : Weekly 1.274 , Daily 1.267 , Hourly 1.261
Supports : Weekly 1.2325 , Daily 1.2445 , Hourly 1.252

BOOKS

The Art of Effective Stop Placement in Forex, Futures and Stock Markets - Jim Wyckoff - EUR 15,70
1607969998