The big US release today is CPI and forecast at 1.2%. To accurately trade CPI, 1.2% must transform from a percent to a decimal to align market price decimals to economic release decimals. From 1.2% factors to its decimal at 0.015 or a value of 150 points for stock indicies and 150 pips for currencies.
Given the radical transformation to interest rates in 2016 by the ECB then all central compliance, no longer are 150 point and pip movements seen to any economic release. Consider the S&P’s daily range barely trades 32 points per day, DXY 50 points, EUR/USD barely 60 pips. GBP/USD last week upon the BOE announcement traded hardly 70 pips. Interest rate transformation severely limited daily ranges.
The 150 pips and points must then reflect to the specific ranges of the respective financial instrument. The breakdown from 150 factors to 37 and 18 or more specifically as 18.5 and 37.5 and 0.5 as a terrible number actually means 18 or 19 and 37 calculates to 37 or 38.
The next small polemic is the announcement at 8:30 am when day trades new time based on the ECB transformation runs from 1:30 am EST o 9:00 am then comes the ECB fix. Most significant prices already traded and not much remains for CPI.
Soon the new trade times will run from 2:30 am EST to 10:00 am then the ECB Fix. The ECB eliminated the 8:30 am EST fix to allow a 7 1/2 hour day trade time to ensure ranges would automatically flatten to day trade interest rates. If a point or pip moves in the market then its attribution is due to an interest rate move.
To factor the EUR/USD today for CPI then most vital points from 18 and 37 is located above at 1.2141 and 1.2160 and both points are mid range to the overall day trade. Below points are located at 1.2105 and 1.2086.
Compared to the overall day trade most vital support and resistance points, EUR/USD aligns as 1.2062 bottom then 1.2074, 1.2086 CPI and 1.2090.
Above is located as 1.2141, 1.2153, 1.2160 and 1.2184.
Subtract the CIP points then most vital points today are located at 1.2062, 12074, 1.2090 Vs 1.2153 and 1.2184.
EUR/USD traded highs today at 1.2143 and 1.2113 lows for a 30 pip range. Today’s EUR range failed to dent its overall trade movement ability therefore a day trade remains.
Most perfect trade is located at short 1.2184 to target 1.2153 for 31 pips then long 1.2062 to target 1.2074 then 1.2090 for 28 pips. Overall 31 and 28 pips for a 49 pip trade day.
For a look at all of today’s economic events, check out our economic calendar.