Forex News outlook for Oct 11th - 15th

[supertrader05]

Hello All,

News and fundamentals are pretty important for trading - especially I have found with currencies. This is my take on the "currents" within the market at present... (for what its worth!)

This week there are 2 “big event” risks – we have the FOMC meeting minutes on Tuesday (14:00 EST), and CPI with Retail sales figures for the USA on Friday (08:30 EST).

Last time the FOMC meeting minutes confirmed the quantitative easing program mark 2, and the USD has been reeling ever since. But has it reached bottom, or is there more to go? Whichever way the dollar moves, the FOMC meeting minutes are likely to be crucial. It could be a huge impulse move – so I'm going to position myself to catch the wave! I shall look to trade a breakout at the FOMC meeting, if price sets up. Probably on my favourite GBP/USD.

The market has priced in QE2 already – so if there is any news to suggest that the FED do not need to keep their foot on the accelarator, or even that they can back off a bit, then expect a good sized correction in equity markets and currencies. News to this effect would be the FOMC minutes, or CPI figures on Friday, or even a gaff from some of the officials speaking this week.

With the USA and Japan on a Bank holiday, the markets on Monday are likely to be unusually quiet and range bound. There isn’t really much news all day – EXCEPT that trichett is speaking at 12:00 (EST). Trichett is normally pretty calculated – but he is speaking about the financial system.

Does anyone have any other ideas as to what could change sentiment and kick off a reversal? I hope that this post proves useful...

Any comments or posts would be appreciated!!

 

[germeten]

What direction do you think a person should go on Today's CPI, Retail Sales, Business Inventories and Mich. Univ. Sentiments!

 

[supertrader05]

Well, they may come out mixed, so it's pretty difficult to say! Also Bernanke is speaking in 15 mins. I'd wait for the market reaction and see what the sentiment is.

 

[germeten]

Too late, I was hoping to know which way to place my orders this morning, since news events often create major spikes a person can profit from. That's what news-trading is all ABOUT. Well, the market spoke, both a high and then further lows.

Really all the chit-chat without taking a position doesn't do anyone any good. Anyone can back out and SEE the trend. (My 2 cents.)

 

[supertrader05]

Too late, I was hoping to know which way to place my orders this morning, since news events often create major spikes a person can profit from. That's what news-trading is all ABOUT. Well, the market spoke, both a high and then further lows.

Really all the chit-chat without taking a position doesn't do anyone any good. Anyone can back out and SEE the trend. (My 2 cents.)

There are news events that create spikes that you can profit from, and there are bigger news events that are trend changers and can move the markets for days to weeks.

The release of Halifax price index data for GBP for example, could cause a spike over a couple of hours. There may be an initial 40 pip move in the first minute (if it's a surprise result), then a retracement (at which point it can be good to jump in) then price may continue up for a while (say about 30 - 50 pips). After which the market has pretty much priced the data in.

Bigger news events like central bank changes in policy can affect the markets for a much longer time. For example, the news that the FED was commencing more quantitative easing at the end of september has been the fundamental driver / current that has been pusing this rally in risk appetite. Knowing the news/ fundamentals behind the move adds conviction to your trades... your trading with the banks and professional traders. You can also get in very early in the trend, and have an idea that it's going to continue for some time. You can get in before it's obvious the trend has changed, because it's this information that changes the trend.

There are also other ways of using the news. Being highly speculative markets will often price in news before the release. If the forecast for NFP (non farm payrolls) for example is good, then many big traders will speculate early on in the week and start pushing USD up. This can be used sometimes, as you can place a position early in the week and ride it until the release. This happens with other important releases on different currencies as well. News trading is about pre-sentiment, fundamental currents and news spikes if you ask me.

You can also fade news spikes - but you need to know which news is important and has implications and which do not.

Anyway my forecast was really looking at the fundamental currents in the forex market. Once you know what data/ information has been released then a position can be taken, perhaps a longer term one.

 

[germeten]

I know what's possible with news, I did well the beginning of the week, wagered a third and won as much, then frittered even more away trying to scalp. (Did I mention I'm a newbie?) What a lesson! Anyway I dislike ambiguity and want to win big, fast, hard and often, with minor risk, like anybody. I hate missing opportunities and don't share common economic sentiments, but it's what other participants think that moves the market; like this morning where the upward spike could have repaired my losses.

The problem with long-term trends is they're painfully slow, great if you have big capital already and can earn small gains to cover your living expenses. Others of us don't have those resources or luxury.
We're hot on the forge and don't like to waste time or words.