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Forex Analysis (Wed August 18, 2010 4:30am EDT NY Time) UK MPC Meeting Minutes...

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Aug 17, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    MPC Meeting Minutes is scheduled to be released today and since it is customary for BOE (Bank of England) not to release a statement along with its interest rate decision (2 weeks ago) where there were no changes in either rate decision or APF (Asset Purchasing Facility, UK’s quantitative easing program), today will be the first time for a glimpse into what took place during this meeting, here is the forecast:

    4:30am NY Time UK MPC Meeting Minutes Forecast 0-0-9 Previous 0-0-9
    ACTION: GBP/USD BUY (2 Vote For Hike) / SELL (2 Vote For QE)


    The Trade Plan
    We will be looking at the vote count today. If we get 2 votes for hiking 25 basis points, we should see some strengthening in the Sterling and a BUY GBP/USD trade should be justified. If we get 2 votes for quantitative easing, or to increase the currency APF from 200 Billion Pound, GBP should weaken and a SELL GBP/USD trade should be justified.

    Due to the nature of this release, you need to have a newswire or audio service in order to trade it. We should see a steady market reaction after the release and possible carry over to the NY Session.

    I'll be looking for an after news retracement trade. For more information, please read:
    Henry's News Trading Methods.

    The Market
    Once again, MPC or Monetary Policy Committee, from Bank of England (BOE) will be releasing their meeting minutes on the Rate Decision meeting along with the actual vote count over the rate decision and the Asset Purchasing Facility program. If you recall, MPC once again left both intereste rate and APF unchanged.

    We’ll have to pay more attention today and look for the vote count on both the rate decision and APF program. If there are any dissenters in either vote, we could see market react to it immediately and we’ll analyze the vote and possibly jump into a trade.

    This is what is expected for this MPC Meeting Minutes: BOE Andrew Sentance is expected to be the lone dissenter again wanting a 0.25% rate hike. However, it is increasingly likely to see another BOE member joining him. If this is the case, market should take this as a sign that BOE is gradually moving towards more tightening.

    On the other hand, last quarterly BOE Inflation Report opened the door for possible further monetary policy easing, or increase of the APF program from the current 200 Billion Pound level. As a matter of fact, during today's inflation letter from BOE Governor King to Exchequer Osbourne, BOE is taking a neutral stance on both easing or tightening for the future (ease = cut rates or raise stimulus, tighten = hike rates)

    Additional Thoughts
    We’ll wait for the release and then see how the market reacts afterwards. The focus will be on the actual vote count and if we do have dissenting votes, then market could move in a steady manner for the next few hours, giving us plenty of opportunity to cash in on the movement, therefore spike trading is really not necessary.

    With the outlook for this meeting minutes remaining uncertain, a few analysts are calling for a 3 way split, which is for a 1 (hike) - 2 (increase APF) - 6 (unchanged). If we get this kind of split vote, 1-2-6 or 1-2-5 with one missing vote, market should react negatively towards the GBP.

    Pre-news Consideration
    I'm looking for a SELL on GBP/USD prior to the release on a spike up. I'd wait for an entry above 1.5650 level or even at the 1.5700 level before taking a SELL trade. MPC Minutes should reveal a stronger bias towards easing policy, especially after the recent CPI data and BOE Inflation report.

    Thanks,


    [​IMG]
     
  2. C. Collins

    C. Collins Private

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    Henry (Or Anybody),
    Any good news on Tues morning news release with the GBP/USD?
    Thanks, C. Collins:)
     
  3. 15IHc

    15IHc Recruit

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    fxEd

    Henry,

    This is my first post, or an attempt at it.

    You certainly know a lot about global economies, and how to make money using what you know. And the fact that you make it so understandable for the rest of us is a real credit to your ability.

    My thanks to you and to FPA for retaining your services.
     
  4. I-ching

    I-ching Recruit

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    I am looking for some kind of audio for this release found nothing as of yet.. I also would appreciate a link if anyone knows of one.. already in sells pressure looks to be down breaking 1.5650-30 area now have a feeling GBP will be way down by morning.
     
  5. Vladon

    Vladon Private, 1st Class

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    Are you sure?

    Are you sure that at previous MPC meeting was present all 9 of its members and that they voted unanimously?

    As far as I remember (and according to the "Minutes of the MPC Meeting held on 7 and 8 July 2010" from the BoE site):

    "Seven members of the MPC (the Governor, Charles Bean, Paul Tucker, Spencer Dale, Paul Fisher, David Miles and Adam Posen) voted in favour of the proposition. Andrew Sentance voted against, preferring an increase in Bank Rate of 25 basis points."

    According to the FXF, expectation for the MPC vote this month is 1-0-8.
     
  6. precap2

    precap2 Private

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    It might just be an error. We're all prone to it, aren't we? But the most interesting thing about FPA news trade since Henry is that we now get deeper insight from a seasoned analyst who doesn't ignore the entire technical outlook for the market.
    Did you read the last suggestion about possibility of price moving to 5650/700 area and making a turn? That's very interesting. I'll both watch and learn.

    Precap2
     
  7. BayoBest

    BayoBest Private

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    Great Work

    Henry,

    This a great work Henry. I'm new in FOREX. Still working on Demo. I've tried many methods and analysis which doesn't give me much or seams to be too complex, but ever since i came across your's and followed it in just few weeks, it indeed gave me courage that one can achieve some positive things in FOREX market. I wish these your valuable information continue. As i so much believe that there still some people there enjoying it without comment.
    KUDOS :):):)

    Sam
     
  8. Pcamargo

    Pcamargo Recruit

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    Outlook and questions

    Hi Henry,

    Thanks for the analysis and posts. I read them all and am learning a lot!
    In that sense I have 2 questions:

    1- I want to startt reading the fundamentas, where do you recommend I start? What do you read to keep yourself updated with the world's economic events?

    2- With thisa outcome for the GBP, are you still looking to short the GBP/USD or GBP/JPY? In the short term, do you believe that the risk appetite is increasing?

    Thanks again and am looking forward to tonights webinar to kick of the 10k to 1mm program!

    All the best
    Paulo
     
  9. fmlbfx2010

    fmlbfx2010 Private

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    Hello,
    We hsve to buy or sell
     

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