On Thursday 04-16-09 at 10:00 AM ET, the USD Philadelphia Fed Manufacturing Index report will be released for the month of March.
The previous USD Philadelphia Fed Manufacturing Index report came out on Thursday 03-19-09 at 10:00 AM ET.
The USD Philadelphia Fed Manufacturing Index report released in March, for the month of February, was set up as follows:
Previous Report: -41.3 – down from -24.3.1 for the February report – no revision.
Economists Forecast: -39.1 – an improvement for the US economy.
The actual report: -35.0 – greater than forecast by 3.9 and good for the US economy, but enough for a trade or to move currency pairs in the right direction for long.
I monitored 4 currency pairs during the March USD Philadelphia Fed Manufacturing Index report and here is what happened:
EUR/USD – moved up about 16 PIPS 1st minute – wrong direction
moved down about 31 PIPS in 8 minutes – right direction
moved up about 80 PIPS 26 minutes – wrong direction
GBP/USD – moved up about 16 PIPS 1st minute - wrong direction
moved down about 25 PIPS in 6 minutes – right direction
moved up about 80 PIPS 36 minutes – wrong direction
USD/CAD – moved up about 28 PIPS in 9 minutes – right direction
moved down about 48 PIPS 1st minute – wrong direction
USD/JPY – moved down about 7 PIPS in 7 minutes – wrong direction
moved up about 10 PIPS in 8 minutes – right direction
moved down about 100 PIPS in 25 minutes - wrong direction
The USD Philadelphia Fed Manufacturing Index for this month’s release ( a report on March USD Philadelphia Fed Manufacturing Index ) has a “forecast” of -31.8, a small increase in the health of the economy for that month.
If the “actual” USD Philadelphia Fed Manufacturing Index report comes out less or more than the “forecast” by a large amount, say 8 or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up:
The March previous= -35.0
The economists forecast= -31.8
If the “actual” report comes out -22.0 or more, this will be good for the USD, and a big surprise for traders. Any currency pair which includes the USD may move in favor of the USD.
However, if the “actual” report comes out at -39.8 or less, this would be bad for the USD and again, a big surprise for traders. Any currency pair which includes the USD may move against of the USD.
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the U.S. economy – could adversely affect the market.
Sometime after the end of the USD Philadelphia Fed Manufacturing Index report I will post the results. So, check back!
Thursday 04-16-09:
Here are the results of USD Philadelphia Fed Manufacturing Index report:
Previous Report: -35.0 -
Economists Forecast: -31.8 – an improvement for the US economy.
The actual report: -24.4 – greater than forecast by 7.4 and good for the US
This was good for the US economy, but the deviation of 7.4 was not near enough for any good solid currency move.
Here is how it affected the 4 currency pairs I follow:
EUR/USD – moved up/down about 13 PIPS 1st minute -
then moved in a 10 PIP range about 30 minutes
moved down about 27 PIPS in 15 minutes – right direction
GBP/USD – moved up about 20 PIPS in 4 minutes – wrong direction
then moved down about 35 PIPS in 43 minutes – right direction
USD/CAD – ranged
USD/JPY - moved up about 20 PIPS in 2 minutes – right direction
moved down about 15 PIPS in 15 minutes – wrong direction
GBP/USD was a likely trade possibility, I did not trade it after the report – however, I have been watching the movement of currency pairs prior to the economic reports.
It appears that traders start “covering” their trade positions within 30 minutes prior to the release of the report. Sometimes a good “scalp” opportunity avails itself and today I was able to get in a small “scalp” about 24 minutes prior to the report.
Another good aspect of the pre-report “scalp” is that the spread of my FOREX broker is at a minimum for many currency pairs (hope they are not reading this).
So, if you are like me and enjoy “scalping” for a few PIPS here and there, look into the first 30 minute opportunity prior to the economic report release.
