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Forex Trading the News... explained

Discussion in 'Forex Forum' started by AlGer, Feb 6, 2016.

  1. AlGer

    AlGer Guest

    Hello Everyone,
    I wanted to give my take on trading the news. This is one of the hardest things to do, and generally regarded as impossible to predict. I agree. I will be publishing a booklet on what i look at and how i interpret price movement ahead of economic news releases.

    Two days ago US Dollar lost huge ground as seen on the Dollar Index. In two days it was back to levels in September 2015! It lost 4 months of gains in two days. This happened right after Federal Reserve President William Dudley said on Wednesday that the weakening outlook for the global economy and any further strengthening of the dollar could have "significant consequences" for the health of the U.S. economy.

    From a technical point of view, the very strong price move was in anticipation of the news release ( in 40 minutes from now ), 0830 ET. On Thursday EURUSD continued to strengthen showing two huge solid green days for that pair to levels not seen since October 22, 2015.

    Last night i put in buy orders for EURUSD, and NZDUSD. It not often I put in orders for news release so far in advance but certain price movement ( or lack of such ) tells me what the move will be on the next news release. In Today's case, looking at the 4 hour USD charts, as of Thursday evening, the NZD and EUR hadn't fallen back at all, whereas GBP and CAD had. JPY hadn't either. So that showed me the strongest currencies for the upcoming trade. Hence my entry in NZD and EUR.

    Next I looked at Daily charts, Which showed such a strong move, without any reversing or fallback, it would continue for the news release. Right now its 30 minutes before the US Jobs Report ... so lets see how it turns out. Good Luck everyone !!

    Source.
     

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