The Fundamental FOREX Blog

Tomorrow, Friday 08-14-09 at 9:55 AM ET the University of Michigan will be releasing two monthly reports, Consumer Sentiment and Inflation Expectations.

These two reports do have an impact on the FOREX market when the “actual” comes out different from the “forecast” – Consumer Sentiment appears to be the stronger of the two.

Most FOREX web sites that display a FOREX Calendar show this report as coming out at 10:00 AM ET instead of 9:55 AM.

It seems to me that many traders will refresh FOREX Calendars in order to get an update of the reports – this method of getting a reports “actual” and ”revised” information is highly inefficient and slow.

I use FOREX Factory’s Calendar, FF has provided a button that can be used to acquire news reports at about the same time they are being released. Here are 3 views of how it works.

FF Calendar "news" buttons five minutes prior to report release

the FF news button in action

results of hitting the FF news button, a few seconds later

With this button, I am able to get the U of M news release at about 9:55 AM ET, way ahead of most traders – works just as well with other important scheduled news releases.

These buttons are placed about 5 minutes prior to a news report release.

The last release of this report was on Friday 07-10-09 at 7:55 AM ET.

The statistical set up and results were as follows:

USD U. of Michigan Confidence Stats:

Previous = 70.8

Forecast =  71.1 revised =  70.9

Actual =  64.6

The difference between the “actual” and the “forecast” reports was only 6.50, but it did have some small impact on the market. The report was bad for the USD.

Of the six currency pairs that I usually monitor for this news report, only two showed any real promise for good “scalp” trading.

Keep in mind, some of the traders get the U of M reports at 9:55 AM ET and others do not get them until 10:00 AM ET – you can see how things go in the charts.

a one minute EUR/USD chart

At 9:55 AM ET some traders had received the reports and had entered the market, or, perhaps they were exiting the market, I cannot tell – anyway, the market spiked down the 1st two minutes about 16 PIPS, then moved up 10 PIPS in 4 minutes – then the 10:00 AM traders received their reports and the market moved down about 9 PIPS the first minute.

The next 13 minutes the market moved against the USD a good 32 PIPS.

a one minute USD/CAD chart

As you can see in this USD/CAD chart, the currency pair moved in favor of the USD from the moment that the 9:55 AM ET report had been released, as it moved up about 25 PIPS in 7 minutes, however, the third minute into the 10:00 AM ET, the market appears to see that the reports had come out against the USD and this pair moved down about 40 PIPS in 13 minutes.

The statistical set up and possible results are as follows:

USD U. of Michigan Confidence Stats:

Previous = 66.0

Forecast =  68.6

If the “actual” comes out as “forecast” or higher, it will be good for the USD.

I will be posting a “review” of this report in the near future.

Stay tuned!