Profit Mongers @ 3:18 AM, Tuesday November 08 2011
0430 UK Industrial Production m/m (+0.1% expected, +0.2% prior, -0.7% to +0.7% range)
Affliated Reports:
UK Industrial Production y/y (-0.8% expected, -1.0% prior, -1.6% to 0.0% range)
UK Manufacturing Production m/m (+0.1% expected, -0.3% prior, -0.6% to +0.4%)
UK Manufacturing Production y/y (+1.9% expected, +1.5% prior, -0.5% to +2.2%)
UK NIESR GDP Estimate (+0.5% Prior)
Last month's +0.4 deviation on this one brought about a small 10 pip pop higher before a total
reversal lower some 40-50 pips below pre-release. Although this deviation was not enough to
trigger a trade, it is not very reassuring to see this response to a higher figure than expected.
There was however a revision to the previous month of -0.4 from -0.2, and a +0.1 deviation on the
y/y figure but also the previous month was revisied down. In September this one also deviated
downward from +0.2 to -0.2, and there was only a very quick 15 blip down and price chopped around
for 15 minutes before heading higher. In August there was a similar -0.4 deviation but this time
the there was a better move down of about 50 pips although it appears the move started a minute
or 2 before the actual release. The y/y figure also had a -0.5 deviation lower and revisions to
the previous month were both -0.1. Although in the past we have watched triggers as low a +/-0.5
for aggressive spike trading. It is necessary to widen these out to at least +/-0.8 and more
conservative spike traders could use triggers of around +/-1.2. Somewhere in between could be a
good option for those somewhere between aggressive and conservative such as +/-1.0. Spike trade
the main Industrial Production number and then quickly chek that the Manufacturing Production
figure aggrees.
Aggressive
If it comes out at +0.9% or higher, and the other figures agree, GBP/USD should rally 30-50 pips
If it comes out at -0.7% or lower, and the other figures agree, GBP/USD should drop 30-50 pips
Conservative
If it comes out at 1.3% or higher, GBP/USD should rally 45-80 pips
If it comes out at -1.1% or lower, GBP/USD should drop 45-80 pips
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