Fx News Spike Signals by Crazy Cat, 2020/01/23

Release Time: 16:45 New York time (EST)
Primary currency pair: NZD/USD
Forecast: 0.4
Prior: 0.7
LT1 (Lower Trigger 1): -0.2 [SELL]
UT1 (Upper Trigger 1): +0.2 [BUY]
Safety: 1

If New Zealand CPI (Q/Q) comes out at 0.2 or less ( -0.2 trigger), then I would sell NZD/USD and expect about 35 pip move. If it comes out at 0.6 or higher ( +0.2 trigger), I would buy NZD/USD and expect about 35 pip move as well.

Based on just 21 estimates for NZ CPI (Q/Q), the median estimate is 0.4% and the average estimate is 0.39%. The highest estimate is +0.6% (one estimate) and then 0.5% (five votes), then 0.4% (nine estimates), 0.3% (four votes), 0.2% (one vote), and finally 0.1% (one estimate). One standard deviation is +/- 0.11%, almost the same as last time.

0.2 triggers sometimes work quite well and sometimes not so well. If you want to play safe, try +/- 0.3 triggers although since the standard deviation is lower this month, I would expect 0.2 triggers work quite well.

Unfortunately, CPI (Y/Y) is typically released shortly after CPI (Q/Q) so you cannot see both at the same time and then decide if you want to trade. For the same reason, you cannot trade CPI (Y/Y) alone as the spike would already happen based on the q/q number that had been released first. However, if we get a decent deviation on Q/Q, then it is very likely we will see some help from the (Y/Y) number as well.

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