Profit Mongers @ 8:52 AM, Thursday January 05 2012
1000 US ISM Non-Manufacturing Index (53.0 exp, 52.0 prior, 52.0 to 55.0 range) 52.5-53.5 most
Last month's -1.9* deviation just caused choppy price action on the USDJPY for 20 minutes until it
finally dropped a bit over the next hour, but as usual with the $Yen the move was very small in
pippage terms, just 15-20 pips. The CADJPY initially blipped about 10 pips lower before coming
back to the pre-release price for 3-4 minutes, it sold off again, going choppy for 40-50 minute
before selling off nicely 50 pips thru the rest of the US Session. In November a -0.6* lead to a
35 pip drop in the CADJPy over 4 minutes. The most recent large deviation was in September when a
+2.3. The USDJPY and CADJPY spiked very briefly and then had quite significant sell offs. USDJPY
just moved up a few pips but the CADJPY spiked about 25 or so. This lasted 1 minute and then there
was about 10 minutes of consolidation as the pair came back to gradually to its pre-release price.
But then even this broke and over the next half hour further downward pressure grew to the point
where it was 50 pips below the spike high caused by the news. So a big deviation and only a modest
spike with no continuation and in fact quite a sell-off. After 45 minutes thou things then did turn
around again and rally above the pre-release, above the initial spike high and higher. Indeed quite
a fake out!! Now since that good deviation we have seen pretty good responses to small deviations,
so what can we do. This depends on what kind of slippage control and execution speed but if you can
profit on a 20-30 pip spike which is quick and could reverse then you could trade +/-2.0 triggers, even
+/-1.5 if you use your nominal trigger to just trade a small amount of lots. Otherwise triggers of
+/-2.5 to +/-3.0 are advised. Also you could skip the spike or trade it with small size of lots and
wait for price action to confirm some sort of afterspike trade.
if 56 or higher then buy USDJPY for a potential 30-50 pip move, or buy Yen Cross or EMini
if 50 or higher then buy USDJPY for a potential 20-35 pip move, or buy Yen Cross or EMini
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