Because this is the first quarterly release for the 4th quarter of 2017, we are likely to see huge market reactions today, especially if we get at least 0.2% of deviation. Considering the first release is most likely to surprise the market, I’d sit on the sidelines and stay out of the market until after the news.
Obviously, I’d recommend not to go against the trend, as USD has been under pressure lately. With the market still not too positive over the USD, I will only BUY if we have a strong reason to.
Here is the forecast for the US Adv. GDP q/q (Q4 2017)
8:30 am (NY Time) US Advanced GDP q/q Forecast 3.0% Previous 3.2% (Final Q3 GDP)
DEVIATION: 0.2% (BUY USD 3.2% / SELL USD 2.8%)
The Trade Plan
We are looking for a deviation between 0.2% ~ 0.3% from the forecasted figure of 3.0%. Therefore if we get a 3.2% in the 4th quarter (Q4) 2017 GDP, it would be US Dollar positive. We will BUY USD. However, if we get a 2.8% 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 using 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 an opposite.
DEFINITION:
“GDP, which is defined (by 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 affect FOMC’s decision directly.”