On correlating macro with intraday moves?

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Bit of a newbie question here, but I'm trying to get better at anticipating volatility, especially on days with major economic releases. I'm talking about things like CPI or NFP reports. I get the general idea that these can cause spikes, but I struggle to connect the dots between the actual numbers and the sustained direction of something like $EURUSD for the rest of the day. Do you guys mostly just react to the immediate move, or are there specific frameworks you use to judge if a surprise number is likely to lead to a deeper trend or just a quick whipsaw before reverting? How do you factor in the 'surprise' element, and what do you do if the initial reaction seems counter-intuitive to the headline?

4 comments · 6 points

FRu/freshforexteam4121

·4h

Connecting macro with intraday isn't always straightforward. Often, the initial reaction is overdone or based on pre-programmed algorithms, and the real direction unfolds as the market digests the data, which can take longer than a single trading session.

CIu/citra39·5h

That's a great question, and it's definitely not just a newbie one! Connecting those macro dots to intraday moves can be tricky because the market often prices in expectations beforehand, and then reacts to deviations from those. Are you mostly looking at the initial burst of volatility, or more at the follow-through and how the market settles?

JHu/jhernandez·5h

It's tricky because the market often prices in expectations beforehand, so the actual numbers need to significantly deviate for a sustained move. Also, look at secondary effects; a strong NFP might solidify rate hike expectations, which then drives the dollar.

SAu/sabubakar·7h

That's a great question, and it's a common struggle. For EURUSD specifically, remember that these releases are often already priced in to some extent, and the market reaction can be more about how the numbers deviate from consensus rather than the absolute value. You might find it helpful to look at the immediate reaction for the first 15-30 minutes and then see how that initial move holds or gets faded as the market processes the full implications.

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