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2013-09-16 12:30 GMT (or 14:30 MQ MT5 time| [USD - NY Empire State Manufacturing Index]
actual > forecast = good for currency (for USD in our case)
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New York Manufacturing Index Shows Unexpected Drop In SeptemberActivity in the New York manufacturing sector unexpectedly expanded at a slower pace in the month of September, according to a report released by the Federal Reserve Bank of New York on Monday.
The New York Fed said its general business conditions index edged down to 6.3 in September from 8.2 in August but remains in positive territory.
While a positive reading indicates continued growth in the New York manufacturing sector, economists had expected the index to climb to 9.0.
What Happens When A Range Ends?
Range traders enjoy taking advantage of sideways moving markets as price toggles between key levels of support and resistance. However, what happens when a range comes to an end? Today we will review how to take advantage of range breakouts.
- Identifying Breakouts
- Setting Breakout Orders
- Managing Risk / Profits
Below we can see the current see today’s breakout of the NZDUSD. Before today’s price action, the NZDUSD was trading between resistance at 8162 and support at .7682. As of this week’s trading open, price has moved outside of our noted value of resistance. This move denotes a price breakout, and on these instances previous resistance will become new support. From this point traders can begin looking for new trading opportunities.So now that we have learned how to identify a breakout, let’s discuss a trading plan to take advantage of the move.
Unlike the range trader, breakout traders are looking for key levels of support or resistance to break. If a level of resistance breaks, traders will buy in anticipation of a new uptrend beginning. Conversely, breakout traders will look to sell a break below support. Normally this technique can be used with a series of entry orders even elect to trade a breakout manually through a market order. Regardless of the method of entry, nullified, and fresh positions will look for a new trending market.
Trading the News: U.K. Consumer Price Index
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Trading U.K. CPI - British Pound at Risk for Larger Correction
The U.K. Consumer Price report may trigger a more meaningful correction in the GBPUSD as a slower rate of inflation raises the Bank of England’s (BoE) scope to retain its highly accommodative policy stance.
What’s Expected:
Why Is This Event Important:
In light of the fresh remarks coming out of the BoE Testimony, it seems as though the central bank will toughen its stance to achieve the 2% target for price growth, and the central bank may start to adopt a more hawkish tone for monetary policy as it continues to operate under its inflation-targeting framework.
How To Trade This Event Risk
Bearish GBP Trade: U.K. CPI Narrows to 2.7% or Lower
- Need red, five-minute candle following the print to consider a short GBPUSD trade
- If market reaction favors a sell trade, short GBPUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit, set reasonable limit
Bullish GBP Trade: Headline & Core Inflation Tops Forecast2013-09-17 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Monetary Policy Meeting Minutes]
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RBA Minutes: Bank Doesn't Rule Out Further Easing
Members of the Reserve Bank of Australia's monetary policy board would not call it imminent, but they would not rule out the possibility of further easing, minutes from the bank's September meeting revealed on Tuesday.
The board members felt that it was important to be able to take further steps, should they become necessary, the minutes showed - particularly since the Australian economy has continued to grow slightly below trend.
"Members agreed that the bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them. The board would continue to examine the data over the months ahead to assess whether monetary policy was appropriately configured," the minutes said.
At the meeting, the board decided to keep the benchmark cash rate unchanged at a record-low of 2.5 percent on Tuesday, with a possible depreciation of the currency expected to facilitate rebalancing of the economy.
The RBA has reduced the cash rate by a cumulative 225 basis points since November 2011 on the premise that accommodative policy is needed to support demand in areas outside the resources sector, as the peak in mining investment approaches.
The easing in monetary policy since late 2011 has supported interest-sensitive spending and asset values, and further effects can be expected over time, the bank said.
2013-09-17 08:30 GMT (or 10:30 MQ MT5 time| [GBP - CPI]
If actual > forecast = good for currency (for GBP in our case)
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U.K. Inflation Eases In August
U.K. annual inflation slowed for the second consecutive month in August, driven by a slowdown in transportation cost, data published by the Office for National Statistics showed Tuesday.
Inflation edged down to 2.7 percent from 2.8 percent in July. The rate came in line with economists' expectations. However, consumer prices gained 0.4 percent from July.
Core inflation that excludes energy, food, alcoholic beverages and tobacco, held steady at 2 percent in August, confounding expectations for a moderate rise to 2.1 percent.
In a separate communique, the ONS said pipeline inflation slowed markedly in August, indicating easing inflationary pressure.
Output price inflation declined more-than-expected to 1.6 percent from 2.1 percent a month ago. The rate was seen at 1.8 percent. Month-on-month, output prices edged up 0.1 percent compared with 0.2 percent increase in July.
3 things the Fed might do and what it means for forex: HSBC
Ah, September. Traders have been war-gaming the various scenarios for months. And on Wednesday, Federal Reserve policy makers will conclude their latest policy meeting and reveal whether they’re ready to start scaling back the bond purchases that are at the center of the extraordinary policy measure known as QE3.
Currency strategists Daragh Maher and David Bloom of HSBC have a handy note that looks at three possible outcomes for Wednesday’s big Fed announcement and how to trade each of them. Here they are:
No tapering: If the Fed fails to pull the trigger, “do not be fooled,” they warn.
Tapering: HSBC forecasts the Fed is likely to announce it will cut its monthly asset purchases by around $15 billion, slightly more than the median forecast of $10 billion. But they key question, the strategists say, is simply whether the Fed tapers or not.
Tapering plus new unemployment-rate threshold: This is what could really upend markets. In this scenario, the Fed tapers its monthly bond purchases but also says it won’t consider raising rates until the unemployment rate falls even lower than its current threshold of 6.5%.
Trading the News: Federal Open Market Committee Meeting
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3 Scenarios for Trading the FOMC Interest Rate Decision
- Federal Open Market Committee (FOMC) to Release Updated Forecast
- Fed Chairman Ben Bernanke to Hold Press Conference at 18:30 GMT
A material shift in the Federal Open Market Committee’s (FOMC) policy may prop up the U.S. dollar as market participants see the central bank scaling back its bond-purchasing program to $40B in September.
What’s Expected:
Time of release: 09/18/2013 18:00 GMT, 14:00 EDT
Primary Pair Impact: EURUSD
Expected: $40B
Previous: $45B
Why Is This Event Important:
Indeed, there are three possible outcomes (taper, no taper & no taper with more detailed exit strategy), all of which will set the near-term outlook for the U.S. dollar , but the more encompassing market reaction may take shape following Chairman Ben Bernanke’s press conference should the central bank head continue to call for an end of quantitative easing in 2014.
How To Trade This Event Risk
Bullish USD Trade: FOMC Tapers QE and/or Lays More Detailed Exit Strategy
- Need red, five-minute candle following the print to consider a short EURUSD trade
- If market reaction favors a long dollar trade, short EURUSD with two separate position
- Place stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit, set reasonable limit
Bearish USD Trade: QE Stays at $85B; Fed Supports Current PolicyPotential Price Targets For The Rate Decision
2013-09-18 00:00 GMT (or 02:00 MQ MT5 time) | [AUD - Leading Index]
If actual > forecast = good for currency (for AUD in our case)
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Australia July Leading Index Improves
The Conference Board's Leading Index for Australia rose 0.3 percent for July.
The Board also reported Wednesday that its Coincident Index declined 0.2 percent for July.
The Board also downwardly revised its small June decline to a larger one of 1.1 percent.
The Board said five of the seven components comprising the Leading Index increased in July. Building Approvals and gross operating surplus were the decliners.
2013-09-18 18:00 GMT (or 20:00 MQ MT5 time| [USD - Federal Funds Rate]
actual > forecast = good for currency (for USD in our case)
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For immediate releasenformation received since the Federal Open Market Committee met in July suggests that economic activity has been expanding at a moderate pace. Some indicators of labor market conditions have shown further improvement in recent months, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen further and fiscal policy is restraining economic growth. Apart from fluctuations due to changes in energy prices, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will pick up from its recent pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market. The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.
Stocks Hit Record Highs As Fed Continues Buying $85B A Month
Fed chairman Ben Bernanke: "We are somewhat concerned ... I don't want to overstate it ... this was a precautionary step."