Forex News Trading Events 15th - 19th September

Jarratt Davis

Special Consultant to the FPA
Messages
1,495
Hey everyone,

I’ve put together some analysis of this week’s Forex news events, which I hope will give everyone a good understanding of how I’m viewing the market for this week.

This week’s “high impact” news events that I will be looking to trade are as follows;

[video=youtube_share;DRr4rnpK-_Q]http://youtu.be/DRr4rnpK-_Q[/video]

Tuesday 16th September 2014

AUD - RBA Monetary Policy Meeting Minutes – 02:30am GMT

These meetings are quite important because at the moment we have allot of AUD weakness going on in the markets and effectively allot of people have been confused by this stint of weakness. I myself remain bullish on the AUD and the reason for the AUD sell off has been a combination of things such as Iron ore prices falling and weak Chinese data, now last week we had a reading of stellar employment data from Australia, which caused a notable rally on the AUD followed by a significant sell off whereby it surpassed original lows. The reason for this was the analysts saw that data and as essentially being too good to be true and doubted its validity; either a complete error or the high influx of jobs were added mainly to low pay/low hours positions. All of the above has snowballed into one movement, combined with USD strength; we’ve seen AUD sell off across the board. The main reason is the concern over commodity prices but generally nothing that has a significant bearing on the Australian economy as its not fed by fundamentally weakness but sentimental; this meeting will give us an insight into what the RBA are thinking of all of the above and if there tone remains unchanged i.e. they’re not concerned in relation to recent AUD weakness, we could expect to see gains by the AUD across the board especially against low yield weaker currencies.

GBP - UK CPI Figures – 09:30am GMT

Figures are expected to be released negative (1.5% against 1.6% previously) however there are analysts anticipating this figure to reach 1.7% and beyond, if this does happen it presents an interesting scenario as it will be a good indication that the UK economy is heading in the right direction, process are going up, wages are going up and so on. However the particular point of interest regarding this data release is that I don’t anticipate it to have a large affect on the market, simply because of the uncertainty regarding the GBP as the Scottish referendum looms closer and closer. Effectively for the coming week trading the GBP is a very difficult game as there will be no sustained rallies no matter what data is released, that is until we move pass the referendum which opens up a host of possibilities for large variations in price action.

EUR – German ZEW Economic Sentiment – 10:00am GMT

Forecasts are predicting that this data will be negative, no real surprise there, if however we see positive data released by Germany we can expect to see a slight EUR rally only for it to get quickly sold off as fundamentally it’s a bearish currency. Especially against stronger currencies EURUSD for example if we see EUR get anywhere above 1.30 we can expect the market to see this as a very attractive selling price and start selling the EUR.

CAD – BoC Governor Poloz Speaks – 17:45pm GMT

We need to keep a close eye on this due to Poloz’s last statement where he stated that even if data comes out positive on the CAD, there will still be room for improvement in the economy. Therefore we expect him to be dovish, if however he does shock the market and releases a hawkish statement we can expect the market to take this as almost a complete turnaround on his previous statement and we’d see a notable rally on the CAD, although this is very unlikely.

Wednesday 17th September 2014

GBP – MPC Official Bank Rate Votes – 09:30am GMT

We receive this data on Wednesday in conjunction with a host of other data coming from the UK which usually we’d expect to see a significant effect on the market; especially as figures are expected to come out positive more so than previous levels. However for the purpose of reiteration it is worth noting to avoid the GBP regardless of data on account of the upcoming Scottish referendum, but if the data comes out strong we can expect to see a significant rally on the GBP if Scotland votes NO. Again this is all speculative, but worth keeping an eye on simply because if we witness positive data coupled with a “NO” vote we can expect to see a significant rally on the GBP over the next coming weeks.

USD – US Core CPI – 13:30pm GMT

As with all CPI releases we can expect this to have a notable impact on the US currency, the Fed has stated that they are no rush to raise rates and stated that there is room to pick up the slack in the economy before they consider raising rates. However this CPI reading is the index referred to when the Fed considers raising rates, if the data then comes out above expectations or meets expectations we can expect to see a further rally on the USD as it will indicate that the US economy is in recovery and on track to raise rates in the foreseeable future. Therefore we’re going to want to keep an eye on this event as it goes live as figures are expected at 0.2% against previous 0.1%.

USD – FOMC Statement & Economic Projections – 19:00pm GMT

This event is shortly followed by the FOMC press conference at 19:30pm gmt, the market is pricing in an expectation of the Fed becoming more hawkish, that is why we have seen a significant rally over the last weeks. The Fed are expected to change their statement to something like; we’re going to keep monetary policy accommodative for a certain amount of time. This is in contrast to what they have been saying; we’re going to keep monetary policy accommodative for a “considerable” amount of time. The market is expecting them to take the word considerable out of their statement, whereby we expect the fed to possibly give hint that a raise in rates may be sooner than the summer 2015 expectation. Either way this news release is pivotal as if the Fed are hawkish (more so than previously) we can expect the market to take this as a further indication that a hike in rates could be closer than initially expected, this will cause further excitement regarding the USD and we can expect to see some notable rallies especially against the weaker currencies, as the USD rallies we’ve been seeing have been solely on speculation, if we get confirmation of that speculation form the Fed we can expect to see further strength but this time based on tangible commentary. Having said that if this statement comes out and their stance is for the most part unchanged we can expect to see the markets disappointment translate into a short term sell-off on the USD, as the weeks leading up to the statements have been fuelled by excitement on the potential for hawkish commentary from the Fed and anything lacking the hoped for positivity could result in the market losing some of its faith in the USD on the short term. In the long term however; even if the data comes out negative and causes a short term USD, I’ll be viewing this as a good opportunity to get in and buy the USD, given the strength in the labour market, GDP, etc. Essentially I’m still very bullish on the USD but feel the market may of got over excited and if those anticipations aren’t met and the market migrates away from the USD in the short term, we know fundamentally its still an attractive currency and would therefore view any shift down on price action as a good opportunity to get in and hold.

Thursday 18th September 2014

CHF – SNB Monetary Policy Assessment – 08:30am GMT

First of all this is important as the SNB has a policy of very limited communication with the market or making any statements for that matter, the CHF has been under considerably buying pressure recently. This has been particularly true with the EUR/CHF pair where the Swiss have been defending a 1.20 level on that pair, we saw an example of this where the ECB announced they were cutting rates last week and all EUR pairs dumped; except the EURCHF where the Swiss have been buying large amounts of the former currency. We expect to see commentary from the SNB along the lines of; we’re going to defend the EURCHF cap with everything we have, which is in essence unlimited money. If that happens we can expect to see a spike on the EURCHF pair which should see a knock on effect to most CHF and EUR pairs.

GBP – Scottish Independence Vote – all day.

We’ve seen a huge sell-off on the GBP in the weeks run up to this vote, if Scotland votes “NO” which is what I’m expecting we can expect to see a steady normalisation over the coming weeks. If however we see a “YES” we can expect to see a great deal of further volatility on the GBP. I personally will not be trading the GBP in the run up to the vote as I’ve never traded through a situation like this before.


P.S - If you want to learn more about how I trade, check out this link below

http://www.forexpeacearmy.com/forex...e-trading-course-forex-pro-jarratt-davis.html
 
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Triantus Shango

Sergeant Major
Messages
1,372
Jarratt, I hope you don't mind if I barge in. After watching 1 of your vids (can't remember if it was this 1 or another, but the 1 where you mention the AUD trade, EURAUD and AUDUSD), and as I happen to agree with your assessment only from a purely technical POV, I thought that perhaps I'd post some of my charts to help the readers here see where the potential entry points can be found.

So first up, the AUDUSD H4, followed by EURAUD daily and EURAUD H4. All explanations are written on the charts in the callouts (the bubbles with a red border and black background). Don't be daunted if at first the charts seem busy--I toggled on all the indicators pertinent to the discussion so that it would be a little clearer why I am saying what I am saying. But fundamentally, all I am doing is looking at the relative position of price versus previous daily/weekly high/low in relationship to a volatility space as defined by the modified bollinger bands (black lines, yellow midline) with mTDI identifying the low/high point of where in the cycle price is currently considering also position relative to pivots and the tricolor lines (which are nothing more than some statistical theorem applied judiciously (not MAs) within a well defined volatility context).

Hope this helps.
 

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Knight_Rider

Private, 1st Class
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Jarratt, what is your take on New Zealand General Election this Saturday and the implications on the kiwi dollar?
 

Jarratt Davis

Special Consultant to the FPA
Messages
1,495
Jarratt, what is your take on New Zealand General Election this Saturday and the implications on the kiwi dollar?
Hi Knight Rider,

We should see a small migration away from the NZD in the lead up to the election as it does spell uncertainty, however in the bigger picture I can't see it having a large effect on the markets. As monetary policy for the most part and members of the RBNZ will remain unchanged.
 
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Knight_Rider

Private, 1st Class
Messages
45
Hi Knight Rider,

We should see a small migration away from the NZD in the lead up to the election as it does spell uncertainty, however in the bigger picture I can't see it having a large effect on the markets. As monetary policy for the most part and members of the RBNZ will remain unchanged.
Thanks Jarratt. I would assume an outcome of continuity and a decisive vote will be positive for the kiwi while a political limbo would hurt the economy.
 
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