Because this is the first quarterly release for the second quarter of 2014, we are likely to see plenty of market reaction especially in comparison with the prior quarter’s GDP release of -2.9%, today’s release could bring demand back to USD.
Here is the forecast for the US Prelim GDP q/q (Q2 2014)
8:30am (NY Time) US Prelim GDP q/q
Forecast 3.1% Previous -2.9% (Final Q1 GDP)
DEVIATION: 0.2% (BUY USD 3.3% / SELL USD 2.9%)
The Trade Plan
We are looking for a deviation between 0.2% ~ 0.3% from the forecasted figure of 3.1%. Therefore if we get a 3.3% on the second quarter (Q2) 2014 GDP, it would be US Dollar positive. We will BUY USD. However, if we get a 2.9% release or worse, then we would be SELLING USD. We’ll be looking to trade this release based on my Retracement Trading Method; since this is a high impact release, strong market volatility is expected immediately after the release.
I’d recommend to use the Recommended Pair above as it is based on my strength meter by pairing up the best currencies in the event of a better/worse news… or you can just use the default pairs for this news: USD/JPY or EUR/USD
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
DEFINITION:
“GDP, which is defined (from wikipedia) as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP number has a direct effect on the Interest rate of the currency, it is one of the news indicators that affects FOMC’s decision directly.”