Consumer Goods Purchase information of US Rolled Out on Friday
Published By : 21 May 2015 | Published By : QYRESEARCH
The Core CPI and the US CPI reports rolled out on Friday showing the percentage change in the price for goods and services purchased by the consumers.
The Core CPI is a bit different as it excludes energy and food in the final number. The consumer prices compose the bigger chunk of the overall inflation. The traders are watching this owing to the central bank perhaps is raising the interest rates to limit inflation that affects the valuation of the currency as well.
Whilst the Bureau of Labor Statistics is preparing to release this information, the traders can create a trade by using the Nadex Spreads. The upper limit of the lower spread should be where the bottom of the upper spread is, and it should be where the then current underlying USD/EUR is trading. This strategy is said to be an Iron Condor, and for this the trade setup is recommended to have a US$25 profit potential or more than that. To do that, you have to purchase as low as US$13 and sell as much as US$13.
On the basis of the industry research from industry movement after the past releases, it was found that the industry tends to move and then recoil making for a US$25 or more profit potential ideal. The industry can move fifty pips for a 1:1 risk reward ratio. However, since it is estimated that the industry will recoil, the closer to the center between the spreads the industry comes, the bigger your profit will be.