We are technical traders. We are trying to use historical patterns to predict future, repeatable moves. We do pay attention to news, but technical analysis is the main stay of what we do.
This week is likely to be a VERY tricky. We have major news announcements every day & the rumour mill is working over time so many of these moves have the potential to be VERY volatile.
For example we have interest rate decisions from the USA, Canada, Britain, Australia, Europe. Last month the Reserve Bank of Australia was widely expected to raise rates. they didn’t and the Aud promptly fell.
In the UK, the British Government has just introduced savage budget cuts & MPC members showed splits last month in both the desire to raise rates and pump more money into the economy. All of this causes great uncertainty so the announcements will be closely scrutinised & could cause wild swings in price. Swings that could simply ignore previous major support & resistance, at least temporarily.
Then for the USA there is a swathe of big news this week, interest rates, unemployment amongst them. There is the slight matter of the FOMC announcement, there is a LOT of speculation that the Fed will pump more money into the economy. If they do this could have huge effect on the $US & equally if they do not!
Many commentators expect them to do something, so this could be already factored into the price so no action could cause volatile swings too!!
The week then ends with the mentrorpro members day off, otherwise known as NFP friday. This is the most dangerous, scheduled news event of the month & I always avoid it.
So how do we play all this? This will be tricky if you are trying to trade from weekly charts as you will have to close/cancel or at least moves stops on trades or orders, depending on the news that is due on a particular day.
Monday is relatively light for news, so I will do my usual thing & try to make my weekly 100 pip minimum target as early in the week as possible. Tuesday is not so bad, but either cancel, close or move stops on anything Aud or Jpy until their interest rate decisions have been released & the dust has settled.
Wednesday is a Japanese bank holiday so I will ignore any Yen trades that day. A recent Bank holiday saw less than 30 pips movement on the $/Yen all day, so probability says that is likely to happen again, so why go looking for boredom/trouble?
Wednesday from the New York open I will avoid anything $USA related. There is a lot of red flag news, culminating in the FOMC statement. What usually happens there is that a few hours before the FOMC release, price stagnates and then, depending on the announcement we could have wild swings that could carry on all the way through to the London open on Thursday.
Thursday sees British & European interest rate decisions, reports & press conferences and USA employment statistics.
Friday is NFP – No Forex Please
Last week we concentrated mainly on trades placed from my weekly analysis. This week we will return to normal where I will show you areas I am looking at on a daily basis, but I will do brief updates on the weekly trades as & when there is anything I need to report.
As always we have lots of major news including FOMC on Wednesday ( I made a mistake in the video and said Tuesday), interest rate decisions, and culminating in “do anything but forex Friday” NFP news.
Daily & 4 Hour Intra day Analysis
As detailed above the news is likely to control most pairs this week. Many pairs are range bound and big, surprise news could give us break outs, spikes, the works!
Make sure you do not have orders placed or open with big stops around these announcements. Also many pairs are bouncing between relatively small areas so do not be greedy, move stops to entry after 25/30 pips and consider taking some profit there as well.
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