A slew of German and Eurozone news releases hit the wires at 10am GMT (5am EST). The main figure we were watching in this batch of Data was the German ZEW Survey Economic Sentiment, which was expected at +2. Usually a deviation of about +/- 10 on this figure can generate a nice forex trading entry signal. This data is normally released with a ZEW Survey Economic Sentiment for the whole EuroZone, as well as the ZEW Survey Current Situation. These other 2 figures are not as important as the main German number but it does help if the Economic Sentiment figure for the EuroZone deviates from expectations in the same direction as the German Economic Sentiment number. However this morning this news also came with CPI data for the EuroZone. The German ZEW has not been reacting so well the past couple of releases as well as they fact that today it was coming out with all this other data. Sometimes it is only good for a small spike trade, but also it can also generate a nice afterspike trade, so one must be cautious when trading this. Here is the data:
(GE) GERMANY NOV ZEW ECONOMIC SENTIMENT: +1.8 V -6.0E; CURRENT SITUATION: 81.5 V 75.0E
- No revisions
(EU) EURO ZONE NOV ZEW ECONOMIC SENTIMENT: 13.8 V 2.0E
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(EU) EURO-ZONE OCT CPI M/M: 0.4% V 0.3%E; Y/Y: 1.9% V 1.9%E; CPI CORE Y/Y: 1.1% V 1.0%E
- No revisions
Interestingly, the EURUSD blipped down 10 pips of so in the 5-10 seconds before scheduled release. The EuroZone CPI data was released first right at 10am and it was higher with a +0.1 deviation from expectations, and the EURUSD immediately started to move up. About 8-9 seconds later the German ZEW data came out also higher but with only a +7.8 deviation. Then nearly 17 seconds after the initial EuroZone CPI data the EuroZone ZEW came out with a +11.8 deviation. So all good data, but it trickled out and the EURUSD had already moved quite a bit by the time the German ZEW data came out, which was the main piece of data to use for catching a quick forex news spike trade. The SNW autoclick software has built in safety features for such instances so everything was already cancelled, regardless there was a small continuation up after this release and price stayed steady for about a minute after all the data was released. With all the positive data however it was an opportunity to look for a forex news afterspike trade, and the chart included with this post shows how the price of the EURUSD bounced off the 61% fibonacci retracement of the move of the initial spike directly after the news release, producing a quick scalp of 10-15 pips. This release has not been doing so well so it was not worth holding onto it when it appeared to be unable to regain the original spike high level and continue. However the initial price move caused by the EuroZone CPI initially was very interesting and further research into this news figure will be researched. It is not a frequent occurrence that the CPI is release at the same time as the ZEW so it will interesting to see how the CPI moves the EURUSD on its own.
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