The Fundamental FOREX Blog

Durable Goods Orders and Core Durable Goods Orders (“core” is durable goods less transportation items) (MoM) were released by the Census Bureau on Wednesday, June 24, 2009 at 8:30 AM ET.

I monitored and traded the currency pair USD/JPY.

At this point in my education of the FOREX market I make short “scalp” trades for this reason, I am more interested in proving to myself that my assessment of what the market will do when the news reports are released, than I am of making a profit – now if I make a profit that is fine, but that is not my primary purpose.

Anyway back to the events of these news releases.

According to the FOREX calendar that I use for planning for news reports, the “Core Durable Goods Orders” had a forecast of -0.2% along with the previous of +0.4%, a big drop in purchase orders from last month. The “Durable Goods Orders” had a forecast of  -0.6% with the previous of +1.7%, also a big drop.

Here is the chart:

Chart for currency pair USD/JPY

#1. It appears the market is clearing prior to the release of the report. My broker spread is 1.0 PIPS until about 15 seconds prior to the scheduled release, it then jumped up to 10 PIPS.

About 8 seconds after the scheduled release, the “actual” results were posted for both the “Core Durable Goods Orders and the Durables Goods Orders” and came out as such:

“Core” actual = +1.1%
Non “Core” actual = +1.8%

Both “actual” reports were positive and re-enforced one another – good for the out look of the US economy.

Both reports were a surprise and going in the same direction, therefore I set up a buy “Market Order” and waited for the broker spread to fall back.

#2. About 31 seconds into the report – my broker spread dropped back to 1.0 PIPS,
allowing for a possibility of a good “scalp”

#3. At the beginning of the second minute of the news release, I executed my buy market order.

#4. I exited the trade with a “sell market order” about 25 seconds later with a win of 3.2 PIPS.

The small “scalp” of 3.2 PIPS is not much to brag about, with a little more patience an additional 5 PIPS could have been added – but, WE did not know that and the market often looks to the soon to be reported FOMC Statement at 2:15 PM ET.

The major point here – I had a pretty good idea how the market would react – so, you might say that the odds were in my favor.

The “Core Durable Goods Orders” report appears to be the most important of the 2, but if they both go in the same direct and both are a surprise – opportunities will prevail.

The next reports of the “Durable Goods Orders” are scheduled for Wednesday, the 29th of July at 8:30 AM ET – you know what to look for!