James Thatcher's News Trade Journal

Discussion in 'Trade Journals' started by JamesThatcher, Apr 14, 2021.

  1. JamesThatcher

    JamesThatcher Member

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    Mexico MEX interest Rate December 16 2021

    [​IMG]

    What does the data mean to the market?

    Mexico's central bank votes on where to set the countries interest rate.

    Traders watch interest rate changes closely as interest rates are the primary factor in currency valuation.

    A higher than expected rate is positive/bullish for the MXN (Mexican Peso), while a lower than expected rate is negative/bearish for the MXN.




    Historic deviations and their outcome

    June 24 2021 A shock hike in the rate by 0.25 basis points saw three minutes of continuing price action, making for a lovely trade and lots of opportunity to bank loads of pips.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...yMS0wNi0yNCUyMDE4OjA6MDAuMDtzPVVTRE1YTjtyPVMx

    November 12 2020 We saw an increase of +18 basis point (bps) from the average forecast, which created a massive 546 pip move in the first minute following the data release, that's an average of 30 pips per basis point. Great move!

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...yMC0xMS0xMiUyMDE5OjA6MDAuMDtzPVVTRE1YTjtyPVMx

    August 15 2019 We saw a cut of -25 basis points (bps) from the average forecast, resulting in a move of 831 pips which was a lovely move!

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...E5LTA4LTE1JTIwMTg6MDowMC4wO3M9VVNETVhOO3I9UzE




    I will use forecasts of:

    Interest Rate 5.25



    Today's trade plan

    Today we have an expected hike to the rates however it's not a unanimous prediction which always makes interest rate decisions a lot more exciting.

    I'm using an average forecast of 5.33%

    Therefore if we see a hike to 5.25% I will not take a trade.

    If we see a hike of 5.50 % or greater I will take a buy and expect 600 to 700 pips.

    If we see no hike and the rate remains at 5.00 % I will take a sell and expect 900 - 1000 pips

    Today’s liquidity conditions are likely to be sub-par due to the closure of US markets for Veterans Day, and bank holidays in other countries. Which you should be aware of.





    Tradable pairs

    USDMXN


    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.
     
  2. JamesThatcher

    JamesThatcher Member

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    Today we had a first, a surprise hike to the Bank of England base rate. A hike was anticipated to help curb high inflation; however, with the emergence of the Omicron variant widely reported in the Uk media and government announcement of new restrictions, the markets expected this to be pushed back to the new year. However, it was almost a unanimous vote to act now. Great for us. I banked around 75 pips.

    See Chart here:
    https://calendar.galaxysoftwareinc.com/#/chart;i=69074;t=2021-12-16 12:0:00.0;s=GBPUSD;r=S1

    See the video at :
     
  3. JamesThatcher

    JamesThatcher Member

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    United States Non-Farm Employment Change January 7 2022

    [​IMG]

    What does the data mean to the market?

    The headline data of Non-Farm Payrolls (NFP) reflects the change in the number of people employed during the previous month. A higher number of people employed is good for the US economy and would create a buying opportunity on the USD. Vice versa, a lower number would be bad for the US and would generate a sell on the USD.

    NFP comes out with six lines of data which makes this report far more complex. The other two significant lines of data I watch are the Unemployment Rate and Average Earnings.

    The Unemployment Rate, a lower number, is good for the USD and vice versa. Whereas Average Earning a higher number is better for the US economy and vice versa.

    All three lines must deviate in the same direction. I will not tolerate a conflict from either UR and AE.


    Historic deviations and their outcome

    September 3 2021 Today I saw a massive deviation of -515k on the headline Non-farm Payrolls with Unemployment Rate coming out as expected. We saw a decent 20 pip move with continuation after that for the next few minutes. Noticeably GBPUSD worked better on this report.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...S0wOS0wMyUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1NMQ

    August 6 2021 A small 74 deviation actually created a nice move but mainly because UE helped with a 0.3 deviation.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...0wOC0wNiUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1TMTA

    July 2 2021 A decent size 130 deviation gave an excellent spike, but with a 0.3 conflict from Unemployment Rate, we soon saw the move being snuffed out, seeing a severe retrace, just as expected. But, again, this shows the importance of looking at all lines of data.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...S0wNy0wMiUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1NMQ




    I will use forecasts of:

    Average Hourly Earnings (M/M) 0.4
    Change in NonFarm Payrolls 433
    Unemployment Rate 4.1



    Today's trade plan

    Today I want to see a deviation of +/- 220k to take a trade in the relative direction.

    I will be looking for Average Earnings and Unemployment Rate to deviate in the same direction to take a trade. These two lines are very much in focus and can determine how long the move will last.

    This one can get volatile immediately after the data is released while the market digests the numbers. Hold onto your hats. This one is not for the fainthearted.


    Tradable pairs

    EURUSD
    GBPUSD
    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.
     
  4. JamesThatcher

    JamesThatcher Member

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  5. JamesThatcher

    JamesThatcher Member

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    United States Core CPI m/m January 12 2022

    [​IMG]

    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.

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


    Historic deviations and their outcome

    August 11 2021 A small conflict on headline YY prevented a good follow-through, but still, we saw a nice spike. Notice how GBPUSD is outperforming other FX pairs now on US news!

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...S0wOC0xMSUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1TNQ

    July 13 2021 A strong 0.5 positive deviation with support from the other 3 lines created a reasonable and safe move on many pairs, especially EURUSD.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...S0wNy0xMyUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1NMQ

    June 10 2021 Reasonable deviation but a little continuation on USD pairs. This was largely because The US Federal Reserve Board indicated it would look through positive inflation and won't change monetary policy on the back of high inflation. Therefore a sell would have been better on this release.

    Check out the price action here:
    https://calendarapi.galaxysoftwarei...S0wNi0xMCUyMDEyOjMwOjAwLjA7cz1VU0RKUFk7cj1NMQ




    I will use forecasts of:

    CPI - Core (M/M) 0.5
    CPI - Core (Y/Y) 5.4
    CPI (M/M) 0.4
    CPI (Y/Y) 7.0



    Today's trade plan

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

    Today I'm looking for a deviation of 0.2% to trigger a buy or sell on GBPUSD or EURUSD

    I will confirm that all others line deviates in the same direction, I will not accept a conflict on any other three lines!

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


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

    With year on year inflation standing at nearly double the average inflation in normal times. I don't believe the markets will tolerate any more hyperinflation. Therefore, Today either buys or sells will work with a trigger of 0.2%


    Tradable pairs

    EURUSD
    GBPUSD
    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.
     
  6. JamesThatcher

    JamesThatcher Member

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