Trading Tip Charting Economic Surprises

A good tip for traders is to stack up economic data surprises against price action to help explain and forecast the future movement in currencies. Figure 3.2 presents a sample of what can be done. The bar graph shows the percentages of surprise that economic indicators have compared to consensus forecasts, while the dark line traces price action for the period during which the data was released the white line is a simple price regression line. This charting can be done for all of the major...