Trading News Events

Trading the News: U.S. Non-Farm Payrolls (NFP)

A 180K rise in U.S. Non-Farm Payrolls (NFP) may fuel the bullish sentiment surrounding the greenback and trigger a pullback in EUR/USD should the report put increased pressure on the Federal Reserve to further normalize monetary policy.

What’s Expected:

Why Is This Event Important:

With the Federal Open Market Committee (FOMC) widely anticipated to lift the benchmark interest rate at the December 14 meeting, a further improvement in labor market dynamics may encourage the central bank to implement higher borrowing-costs in 2017 especially as the U.S. economy approaches ‘full-employment.’ However, Chair Janet Yellen and Co. may make further attempts to buy more time as officials warn ‘market-based measures of inflation compensation have moved up but remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months,’ and the permanent voting-members may largely endorse a wait-and-see approach going into the year ahead as ‘the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.’

How To Trade This Event Risk
Bullish USD Trade: U.S. Economy Adds 180K Jobs or More

• Need red, five-minute candle following the NFP print to consider a short EUR/USD position.
• If market reaction favors a bullish dollar trade, sell EUR/USD 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.

Bearish USD Trade: U.S. NFP Report Disappoints

• Need green, five-minute candle to favor a long EUR/USD position.
• Implement same setup as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release
EUR/USD Daily

• EUR/USD may stage a larger rebound it continues to hold within the ascending channel from the November low (1.0518), while the Relative Strength Index (RSI) continues to recover from oversold territory, but the longer-term outlook remains tilted to the downside as a bear-flag formation takes shape.
• Interim Resistance: 1.0780 (100% expansion) to 1.0800 (23.6% retracement)
• Interim Support: 1.0500 (50% expansion) to 1.0517 (December 2015-low)

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Trading the News: U.S. Consumer Price Index (CPI)

A pickup in the U.S. Consumer Price Index (CPI) may heighten the appeal of the dollar as the Federal Open Market Committee (FOMC) appears to be on course to further normalize monetary policy in 2017, but a marked slowdown in the core rate of inflation may drag on interest rate expectations as the central bank persistently warns ‘market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance.’

Why Is This Event Important:

Recent comments from Fed Chair Janet Yellen suggests the committee may pay increased attention to the developments in the core rate of inflation as the central bank head argues ‘inflation moved up over the past year, mainly because of the diminishing effects of the earlier declines in energy prices and import prices,’ and the FOMC may continue to endorse a wait-and-see approach at its next interest rate decision on March 15 as ‘considerable uncertainty attends the economic outlook.’ With that said, signs of softening price growth may produce near-term headwinds for the greenback, but the dollar may continue to gain ground throughout 2017 as Fed Fund Futures continue to highlight a greater than 60% probability for a June rate-hike.

How To Trade This Event Risk

Bearish USD Trade: CPI Report Instills Mixed Outlook for U.S. Price Growth

• Need green, five-minute candle following the CPI print to consider a long EUR/USD position.
• If market reaction favors a bearish dollar trade, buy EUR/USD with two separate position.
• Set stop at the near-by swing low/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 USD Trade: Headline & Core Inflation Beat Market Expectations

• Need red, five-minute candle to favor a short EUR/USD position.
• Implement same strategy as the bearish dollar trade, just in reverse.

Potential Price Targets For The Release
EUR/USD

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Trading the News: U.S. ISM Non-Manufacturing

The ISM Non-Manufacturing survey may spark a lackluster market reaction as the index is anticipated to hold steady at 56.5 in February, but a positive development may heighten the bullish sentiment surrounding the U.S. dollar as it fuels bets for a Fed rate-hike.

What’s Expected:

Why Is This Event Important:

The recent batch of hawkish Fed rhetoric have moved interest-rate expectations, with Fed Fund Futures now pricing a greater than 70% probability for a March rate-hike, and the central bank may stay on course to implement higher borrowing-costs over the coming months especially as the U.S. economy approaches ‘full-employment.’ With that said, signs of stronger service-based activity may encourage Fed Chair Janet Yellen to join her colleagues and endorse a more hawkish outlook for monetary policy with the central bank head scheduled to speak ahead of the blackout period. However, a downtick in business sentiment may push Chair Yellen to tame interest rate expectations as ‘market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance,’ and the central bank head may continue to promote a wait-and-see approach as ‘inflation moved up over the past year, mainly because of the diminishing effects of the earlier declines in energy prices and import prices.’

Nevertheless, the slowdown in private-sector lending accompanied by the recent slump in building activity may drag on the U.S. service-sector, and a dismal ISM print may undermine the recent advance in the greenback as it dampens the outlook for growth and inflation.

How To Trade This Event Risk
Bullish USD Trade: Gauge for Service-Based Activity Beats Market Expectations

• Need a red, five-minute candle subsequent to the release to favor a short EUR/USD position.
• If market reaction favors a bullish dollar trade, short EUR/USD 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.

Bearish USD Trade: ISM Non-Manufacturing Survey Disappoints

• Need a green, five-minute candle to encourage a long EUR/USD position.
• Implement same strategy as the bullish dollar trade, just in reverse.

Potential Price Targets For The Release
EUR/USD Daily

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Trading the News: U.K. Consumer Price Index (CPI)

A pickup in the U.K.’s headline and core Consumer Price Index (CPI) may fuel the near-term rebound in GBP/USD as it raises the risk of seeing a greater dissent within Bank of England (BoE).

What’s Expected:

Why Is This Event Important:

Above-target inflation may spark a growing rift within the Monetary Policy Committee (MPC) following the 8 to 1 vote in March, but the discord could be short lived with board member Kristen Forbes scheduled to depart the central bank at the end of June. With that said, Governor Mark Carney may continue to tame interest rate expectations and reiterate ‘monetary policy can respond, in either direction’ as Prime Minister Theresa May plans to trigger Article 50 of the Lisbon Treaty on March 29. The U.K.’s departure from the European Union (EU) may heighten the bearish sentiment surrounding the British Pound especially as Scotland appears to be on course to hold a second referendum, and renew fears of a ‘hard Brexit’ may push the central bank to further support the real economy as ‘the Committee expects a slowdown in aggregate demand over the course of this year.’

How To Trade This Event Risk
Bullish GBP Trade: Headline Reading Exceeds 2% Target, Core Inflation Upticks in February

• Need a green, five-minute candle following the release to consider a long GBP/USD entry.
• If the market reaction favors a long British Pound trade, buy GBP/USD with two separate position.
• Set stop at the near-by swing low/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: U.K. CPI Report Fails to Meet Market Expectations

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in reverse.

Potential Price Targets For The Release
GBP/USD Daily

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Originally Posted by TheNews

Trading the News: U.K. Consumer Price Index (CPI)

A pickup in the U.K.’s headline and core Consumer Price Index (CPI) may fuel the near-term rebound in GBP/USD as it raises the risk of seeing a greater dissent within Bank of England (BoE).

What’s Expected:

Why Is This Event Important:

Above-target inflation may spark a growing rift within the Monetary Policy Committee (MPC) following the 8 to 1 vote in March, but the discord could be short lived with board member Kristen Forbes scheduled to depart the central bank at the end of June. With that said, Governor Mark Carney may continue to tame interest rate expectations and reiterate ‘monetary policy can respond, in either direction’ as Prime Minister Theresa May plans to trigger Article 50 of the Lisbon Treaty on March 29. The U.K.’s departure from the European Union (EU) may heighten the bearish sentiment surrounding the British Pound especially as Scotland appears to be on course to hold a second referendum, and renew fears of a ‘hard Brexit’ may push the central bank to further support the real economy as ‘the Committee expects a slowdown in aggregate demand over the course of this year.’

How To Trade This Event Risk
Bullish GBP Trade: Headline Reading Exceeds 2% Target, Core Inflation Upticks in February

• Need a green, five-minute candle following the release to consider a long GBP/USD entry.
• If the market reaction favors a long British Pound trade, buy GBP/USD with two separate position.
• Set stop at the near-by swing low/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: U.K. CPI Report Fails to Meet Market Expectations

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish British Pound trade, just in reverse.

Potential Price Targets For The Release
GBP/USD Daily

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GBP/USD M5: 56 pips range price movement by U.K. CPI news event:

Trading the News: U.K. Consumer Price Index (CPI)

The U.K.’s Consumer Price Index (CPI) may spark a limited reaction as the headline is projected to hold steady at an annualized 2.3%, but a downtick in the core rate of inflation may weigh on GBP/USD as it encourages the Bank of England (BoE) to preserve a wait-and-see approach for monetary policy.

What’s Expected:

Why Is This Event Important:

Despite the 8 to 1 split in March, the majority of the Monetary Policy Committee (MPC) may try to buy more time as the U.K. officially starts its departure from the European Union (EU), and Governor Mark Carney may continue to tame interest-rate expectations as officials reiterate ‘monetary policy can respond, in either direction.’ However, another stronger-than-expected CPI print may push the BoE to change its tune as the central bank pledges ‘there are limits to the extent that above-target inflation can be tolerated,’ and the committee may show a greater willingness to move away from its easing-cycle as official warn ‘some modest withdrawal of monetary stimulus over the course of the forecast period remains appropriate.’

How To Trade This Event Risk
Bearish GBP Trade: Core U.K. Inflation Narrows in March

• Need a red, five-minute candle following the release to consider a short GBP/USD entry.
• If the market reaction favors a short British Pound trade, sell GBP/USD 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: U.K. CPI Report Continues to Top Market Projections

• Need green, five-minute candle to favor a long GBP/USD trade.
• Implement same setup as the bearish British Pound trade, just in the opposite direction.

Potential Price Targets For The Release
GBP/USD Daily

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I like to trade on the news. And, To tell the truth, I was quite surprised when Exness broker forbade doing it. What's wrong with that company?

Trading the News: Federal Open Market Committee (FOMC) Interest Rate Decision

The Federal Open Market Committee’s (FOMC) interest rate decision may generate a limited market reaction as the central bank is widely expected to keep the benchmark interest rate on hold in May, but the fresh policy statement may boost the appeal of the greenback should the 2017-voting members reveal a more detailed exit strategy.

Why Is This Event Important:

With Fed Fund Futures still highlighting a 70% probability for a June rate-hike, the FOMC may increase its efforts to prepare U.S. households and businesses for higher borrowing-costs as the central bank appears to be well on its way to fulfil its dual mandate for full-employment & price stability. In turn, talks of an imminent rate-hike accompanied by a wider discussion to unload the balance sheet may generate a bullish reaction in the greenback, but more of the same from Chair Janet Yellen & Co. may dampen the appeal of the U.S. dollar as officials tame market expectations and look to buy more time.

How To Trade This Event Risk
Bullish USD Trade: FOMC Fuels Bets For June Rate-Hike & Balance Sheet Adjustment

• Need a red, five-minute candle following the rate decision to consider a short EUR/USD position.
• If market reaction favors a bullish dollar trade, sell EUR/USD with two separate lots.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to breakeven on remaining position once initial target is met, set reasonable limit.

Bearish USD Trade: Chair Yellen and Co. Stick to Current Script

• Need a green, five-minute EUR/USD candle to favor a short dollar position.
• Carry out the same setup as the bullish dollar trade, just in the opposite direction.

Potential Price Targets For The Release
EUR/USD Daily

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