Profit Mongers @ 3:06 AM, Thursday January 12 2012
0430 UK Industrial Production m/m (-0.1% expected, -0.7% prior, -0.4% to +0.5% range)
Affliated Reports:
UK Industrial Production y/y (-2.2% expected, -1.7% prior, -2.5% to -2.5% range)
UK Manufacturing Production m/m (-0.2% expected, -0.7% prior, -0.4% to +0.2%)
UK Manufacturing Production y/y (-0.5% expected, +0.3% prior, -0.7% to +0.5%)
Last month's -0.4 deviation on m/m
and -1.0 y/y also came with similar negative deviations for
Manufacturing production. The pound has sold off a bit heading into the number and continued
down about another 15 pips in the 5 minutes following the release. After some choppy sidewise
action it did later take another fast blast to test the 1.5600 handle about an hour later but
then did manage to mount a rally. November was just a small deviation and sidewise price action.
In october a +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.
If it comes out at +0.7% or higher, GBP/USD should rally 45-80 pips
If it comes out at -0.9% or lower, GBP/USD should drop 45-80 pips
* the pound has sold off since yesterday, perhaps a leak? Tightening the buy side might be an idea
Visit Profit Mongers website and check out our live trading room!