James Thatcher's News Trading Analysis

[JamesThatcher]

What does the data mean to the market?

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected number is positive/bullish for the USD, a lower than expected number is negative/bearish for the USD.

There are 4 lines of data.

Headline CPI - Core (M/M)
CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

Historic Deviations and Their Outcome

March 10 2021 We got a +0.1 on both core lines gave a nice 15 pip move on USDJPY; that's a really nice move for such a small deviation, shows how hot this data is becoming.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDJPY;r=M1

February 10 2021 Check out last months 0.2 deviations, and bear in mind that I expect the same deviations to create a better reaction today!
We can see a small but gradual move over the first one minute.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDJPY;r=M1

November 12 2020 Most of last year, the same deviations were not moving the market, as conditions were very different then, but I believe the focus is back.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDJPY;r=M1

My Forecasts For Today

CPI - Core (M/M) 0.2
CPI - Core (Y/Y) 1.5
CPI (M/M) 0.5
CPI (Y/Y) 2.5

Today's Trade Plan

The focus is on CPI - Core (M/M) - Headline.

I’m looking for a Deviation of 0.2% or greater in either direction from the forecast of 0.2% to take a trade.

So, an actual figure of 0.0% to Sell USD or 0.4% to Buy USD.

We would need to confirm no conflict on any of the other three lines!

CPI - Core (Y/Y)
CPI - (M/M)
CPI - (Y/Y)

If they all lineup, we should bank some good pips today.


Tradable Pairs

USDJPY


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

***********UPDATE********************
We got a positive 0.1 deviation on all four lines of data which caused an excellent spike up in USD pairs, but this was very short-lived and made trading very difficult.



I suspect that this was because, shortly before the trade time, reports revealed that the Johnson and Johnson vaccine was potentially causing blood clots. An impromptu press conference was scheduled 30 minutes after the US CPI release time. Therefore the market ignored the positive CPI data in anticipation of the press conference.


The vaccines are essential to US recovery; any news that calls any interruption to that program into questions will overshadow backwards-looking data. For me, I had a minor loss, as I took a trade regardless. Maybe if we got a 0.2 deviation, that would have been enough to create a sustained move. It shows the importance of being aware of what else is happening in the market. Please pay attention to any event that could shift the focus away from the data we are trading.  

Losses will always happen; luckily, only a slight loss and my overall position on the year is still in profit.


James Thatcher

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDJPY;r=S2

[JamesThatcher]

What does the data mean to the market?

The data indicates the number of crude oil barrels held by commercial firms in the US; this inventory is taken weekly and indicates increases or decreases needed in supply, affecting the price. A Positive number is bad for the oil price. Other oil data is released the night before this report, API Weekly Crude Oil Stock, which the market looks for as an indicator of today's report, which can gauge how it will respond.

There are two mainline of data to focus on. DOE Gasoline Inventories and DOE Crude Oil Inventories, the two lines must not conflict to make this data tradable; Oil is the driving force behind this report.

Historic Deviations and Their Outcome

April 7 2021 Minimal deviations didn't create the move we would need to be safe.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1

March 31 2021 Not much of a deviation on this, but it seems Gasoline won the day!

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1

March 24 2021 Not much of a deviation, but Gasoline seems to have driven price action, and maybe API wasn't considered so much by the market this time?

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1

My Forecasts For Today

DOE Crude Oil Inventories -3000
DOE Gasoline Inventories +2000



Today's Trade Plan

If we get +-4000 from OIL and no conflicts from Gasoline, we can expect a sustained move from Crude OIl or Brent.

Note that I have used hybrid forecasts to accommodate the following.

1) Official DOE Crude Forecast = -2889

2) API Actual Crude = -3600

3) Official DOE Gasoline Forecast = 0786

4) API Actual Gasoline = +5600



Tradable Pairs

USDBNT
USDOIL


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

[JamesThatcher]

Australia Employment Change April 15 2021

What does the data mean to the market?

There are two main lines of data on this release.

Employment Change, the total number of people employed/changed in the previous month; more employment is positive for the Aussie dollar and would create a buy of AUD pairs.

Unemployment Rate, which has the reverse impact, a higher Unemployment Rate is negative for the Aussie Dollar and would create a sell of AUD pairs.

Historic Deviations and Their Outcome

March 18 2021 We got a 0.5% reduction in Unemployment Rate with complimentary 58k positive Employment Change, which gave a great move for the first minute where I banked a few pips here in the first 30 seconds, a great outcome!

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... BPAUD;r=S5

February 18 2021 A prime example of why both lines must deviate in the same direction. This time it conflicted between Unemployment Rate and Employment Change which didn't create a move from which I could profit. So I stayed on the sidelines.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... UDNZD;r=M1

January 21 2021 No deviations on this release, and as you can see from the charts, the market didn’t move!

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... UDNZD;r=M1

My Forecasts For Today

Empl Chg - Full Time 0
Employment Change 35
Unemployment Rate 5.7

Today's Trade Plan

The focus today will be on the Unemployment Rate, this is the key metric that the RBA (Reserve Bank of Australia) is watching and could affect future monetary policy decisions (Interest rates).

If we get a 0.4% deviation from the forecasted Unemployment Rate in either direction with no conflict from Employment Change, then we should see some good moves on AUD pairs.

If both lines deviate harmoniously, we should see a sustained move and rack up a fair amount of pips along the way.
Tradable Pairs

AUDJPY
AUDNZD
AUDUSD
EURAUD
GBPAUD


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.


****UPDATE*****
Minimal deviations today, Also full-time employment gave a conflict. It wasn't a trade for me this time.

[JamesThatcher]

Turkey Interest Rate April 15 2021

What does the data mean to the market?

The Central Bank of the Republic of Turkey's (CBRT) Monetary Policy Committee votes on where to set the overnight interest rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the TRY (Turkish Lira), while a lower than expected rate is negative/bearish for the TRY.

Historic Deviations and Their Outcome

March 18 2021 +1.0 positive deviation from the forecast, which gave a nice move of 750 pips in the first minute, then great continuation afterwards, too!

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... DTRY;r=S10

December 24 2020 +0.5 positive deviation from the forecast, which gave 475 pips in one minute.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... URTRY;r=M1

October 22 2020 -1.75 negative deviation from the forecast, which created a great move! With over 900 pips in the first minute.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... URTRY;r=M1


I will use forecasts of:

Benchmark Rate 19

Today's Trade Plan

25 forecasts today. This is broken down here:-

23 forecast for the rate to stay at 19%
1 forecast for a cut to 18.5%
1 forecast for a cut to 17%

Last time there was an unexpected hike in rates, President Erdogan sacked the central bank governor. Today is the first policy announcement from the new governor Sahap Kavcioglu, who's under pressure to cut rates. So far, he has signaled he won't cut yet but let's see!

Realistically the only feasible outcome from today is a possible cut. So if we get a deviation of 1.0 or more, we can expect a continued and prolonged weakening in TRY pairs.

Tradable Pairs

EURTRY
USDTRY

Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

[JamesThatcher]

There was no deviation today. I feel there was a reasonable expectation of a cut today as TRY pairs strengthened considerably immediately after the data was released.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... .0;s=;r=S5

[JamesThatcher]

Canada Core CPI m/m April 21 2021

What does the data mean to the market?

The Consumer Price Index (CPI) measures the change in the price of goods and services from the consumer's perspective. It is a key way to measure changes in purchasing trends and inflation.

A higher than expected reading is positive/bullish for the CAD, while a lower than expected reading is negative/bearish.

Historic deviations and their outcome

March 17 2021 Small deviations managed to create small moves, nothing exciting, though, and the retraces were swift and dangerous.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... RCAD;r=S30

February 17 2021 Small deviations again created a feeble move.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... RCAD;r=S30

I will use forecasts of:

CPI (M/M) 0.6
CPI (Y/Y) 2.3
CPI Core - Common (Y/Y) 1.4
CPI Core - Median (Y/Y) 2.1
CPI Core - Trim (Y/Y) 2.0

Today's trade plan

We hope that as we move forward, this data will become more interesting to the market. However, we may not be there yet.

Therefore today, I will need an unlikely 0.4 deviation from the forecast in either direction from the headline CPI M/M (month on month), including supporting deviations of 0.1 in the same direction as the headline from the other four lines of data that come out at the same time.
Without the comprehensive deviations on all lines, we may not find any continuation that will bring us safety and profit.

Tradable pairs

EURCAD
GBPCAD
USDCAD

Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

[JamesThatcher]

United States Crude Oil Inventories April 21 2021

What does the data mean to the market?

The data indicates the number of crude oil barrels held by commercial firms in the US; this inventory is taken weekly and indicates increases or decreases needed in supply, affecting the price. A Positive number is bad for the oil price. Other oil data is released the night before this report, API Weekly Crude Oil Stock, which the market looks for as an indicator of today's report, which can gauge how it will respond.

There are two mainline of data to focus on. DOE Gasoline Inventories and DOE Crude Oil Inventories, the two lines must not conflict to make this data tradable; Oil is the driving force behind this report.



Historic deviations and their outcome

April 14 2021 Nice move! But it didn't hit a trigger for me.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1

April 7 2021 Minimal deviations didn't create the move we would need to be safe.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1

March 24 2021 Not much of a deviation, but Gasoline seems to have driven price action, and maybe API wasn't considered so much by the market this time?

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDOIL;r=M1




I will use forecasts of:

DOE Crude Oil Inventories -1500
DOE Gasoline Inventories -1000



Today's trade plan

If we get a deviation of 4000 in either direction from the forecast on Oil and no conflicts from Gasoline, we can expect a sustained move from Crude Oil or Brent.

Please note that I have used hybrid forecasts to accommodate the following.

1) Official DOE Crude Forecast =  -3000
2) API Actual Crude = +0400
3) Official DOE Gasoline Forecast = +0464
4) API Actual Gasoline = -1600



Tradable pairs

USDBNT
USDOIL


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

[JamesThatcher]

Weekly Summary
Last week, I didn't have anything near a deviation, and no pips banked. I stood back and watched NZD CPI as I wasn't confident about how it would react; I'll revisit this next month. Fridays German Composite PMI became overshadowed by current Covid-19 news, and therefore I decided to sit on the sidelines and save my equity.
The most exciting news I saw last week was from the Bank of Canada regarding the forecast of an interest rate hike now looking to hit in 2022 and not 2023 as previously forecast, making Canadian data much hotter than before. This week's diary is pretty sparing again, but remember, it's not about the number of trades. Still, the quality and one or two decent deviations from the forecast is all that's required to keep making the month a profitable one.
Here's is what I am currently looking to trade this week.
27/04/2021 08:30:00 SEK SWE Interest rate
28/04/2021 02:30:00 AUD CPI q/q
28/04/2021 15:30:00 USD Crude Oil Inventories
30/04/2021 13:30:00 CAD GDP m/m
I'm looking for new information in real-time. As the markets change, so will my planned trades. If you don't see a trading plan posted before the trade, I'll let you know why I decided not to trade it, vice versa; if new opportunities come up, I'll post my plan as far in advance as possible, so keep watching this space for updates. I work in real-time so do my trade plans.
Please feel free to ask questions. Good luck this week.
James Thatcher

[JamesThatcher]

Sweden SWE Intrest rate April 27 2021

What does the data mean to the market?

The Sveriges Riksbank Executive Board's decision on where to set the benchmark interest rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the SEK, while a lower than expected rate is negative/bearish.


Historic deviations and their outcome

December 19 2019 Spike but retrace due to not being a total surprise on this occasion.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... SDSEK;r=S5

December 20 2018 Great move on SEK pairs, as we would like to see today.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... DSEK;r=S30




I will use forecasts of:

Interest Rate Decision 0
SE Rates Forecast Q1 0
SE Rates Forecast Q2 0
SE Rates Forecast Q3 0
SE Rates Forecast Q4 0
SE Rates Forecast Q5 0
SE Rates Forecast Q6 0
SE Rates Forecast Q7 0



Today's trade plan

Today we don't expect any move from the Interest rate. But we may get some activity from the rate path. Previously the path was flat, with all lines showing 0. However, today, if any of the lines show a positive or negative deviation and don't conflict with each other. Then we can look to take a trade in the direction of the deviation.

We also get Quantitative Easing (QE) at the same time. The problem we see with this event is SEK IR path could be up or down. (a cut by the end of 2021 and 10% to a hike by 2024) BUT the QE may counter-act to the longer-term path. So, we may get a positive path, but short term QE increase or vice versa effectively a conflict.

If all deviations align, we could see a prolonged move.


Tradable pairs

EURSEK
USDSEK


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

[JamesThatcher]

Australia CPI q/q April 28 2021

What does the data mean to the market?

The Consumer Price Index (CPI) measures the change in the price of goods and services from the consumer's perspective. It is a key way to measure changes in purchasing trends and inflation. The impact on the currency may go both ways. A rise in CPI may lead to a rise in interest rates and a rise in local currency. On the other hand, during the recession, a rise in CPI may lead to a deepened recession and a fall in local currency.

The RBA has a dual mandate of reduced unemployment and achieving higher inflation, So we hope a surprise increase in the CPI figures could fuel a new debate for the RBA on when it would begin tapering.


Historic deviations and their outcome

January 27 2021 Headline Q/Q and Y/Y gave +0.2. Trimmed Mean was flat, though so not ideal. The move was respectable, lasting a good 30 seconds!

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... DUSD;r=S10

July 29 2020 Trimmed mean gave a -0.2 dev but conflicted with a positive +0.1 from Headline. Nevertheless, Trimmed Mean won the day and blew away the conflict.

See Chart here:
https://calendar.galaxysoftwareinc.com/ ... DUSD;r=S10




I will use forecasts of:

CPI - Trimmed Mean (Q/Q) 0.9
CPI - Trimmed Mean (Y/Y) 1.4
CPI (Q/Q) 0.5
CPI (Y/Y) 1.2



Today's trade plan

We need the Trimmed Mean QQ and/or YY to deviate by +-0.3 with no conflicts from the Headline QQ and YY. If this happens, we should see a prolonged move that we can benefit from. Any AUD pair will move from this data.


Tradable pairs

AUDJPY
AUDUSD
EURAUD
GBPAUD


Hope this helps but please do your own analysis!!

Good luck!!

James Thatcher

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.