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Forex Signal (Monday February 6, 2012 – 11:30pm EDT) – AU Interest Rate

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Feb 5, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello Members,

    Today we have AU Interest rate due to come, this will be an interesting release due to the current circumstances, looks like an interest rate drop is on the cards. Please find my trade plan bellow.

    AU Interest rate
    Forecast 4.00%
    Previous 4.25%
    Pair to trade: AUD/USD

    Numbers we need:
    BUY AUD/USD 4.50% or greater
    SELL AUD/USD 4.00% or lower

    Economical Impact: Critical
    Typical Result: Hawkish, Good for Currency
    Occurrence: First Tuesday of the month in Australia.
    Spike Probability: Good, we can see 35 pips or more on initial spike

    About our Triggers:
    If RBA increases interest rates, we should SPIKE in AUD of 35 pips and I will buy AUDUSD or other AUD crosses.
    At the present moment, the expectation for a rate drop is on the cards with a decrease we could see some AUD sell off prior to the news.

    If RBA decrease the rate we could see a 35 pip spike to the down side with AUD loosing over 150 pips by weekend

    There is still a pull back in the housing market over Australia. RBA will make further statements after the release in the condition of the economy and there forecast this will make the AUD very volatile.

    What is it? And why does the market care?
    The Reserve Bank of Australia's monthly interest rate statement describes its latest decision regarding changes to the country's short term interest rates, monetary policy, and the direction of the economy.
    Short term interest rates are the key factor in currency valuation. A dovish statement could push AUD down against its rivals, while hawkish statement could boost the currency.

    Method I use to trade this:
    Stavro D’Amore Trading Method

    I will Look to sell AUD/USD around 30 mins prior to news and be closed out of this trade before its release, I will base my trade on volume Price action and selling MACD and TRIX indicators on a 15 min chart.

    I will trade SPIKE on this release.

    I will look for a 50% retracement in the original spike if our triggers are hit before entering. I will be looking at a 5 minute chart. I will close half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

    My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyze this.

    Historical Chart and AU RBA Interest Rate

    All the best

    Stavro D’Amore
     
  2. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hi All

    It Stavro here.

    Thanks for your support, If you have any questions about trading or feedback on how to improve things let me know.

    I can be contacted stavro.damore@hotmail.co.uk
     
  3. RahmanSL

    RahmanSL Major

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    Hi Stavro,

    Thanks for your FREE analysis and time in preparing & posting this thread every week.
    Just ignore those critics coz, as you have said, this is all FREE stuffs and nobody is forced to follow anything.

    Yes, I think the AUD will be a potentially profitable trade today as the Aussie economy is so export orientated that they cannot afford a high currency.
    In anticipation of the rate cuts, I have already taken up short positions on the AUD/USD since last week as it was already way too high.
    This morning during the Asian session, I have added a few more shorts on the AUD/USD and taken a few AUD/CHF and AUD/JPY.
    The AUD/JPY has been projected by some quarters for a fairly large downward movement.

    Ok, all the best in your trades!


    P/S: BTW, I didn't know you don't get paid even for being "Special Consultant to the FPA". All along, I thought that title entails some payment for your effort & time....hmmmmm...old Felix must be either or getting close to being a billionaire by now! :p
     
  4. widilye

    widilye Recruit

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    Thank you for your analysis AUD/USD, can you analysis for EURO (EUR/USD) and POUNDS (GBP/USD) too...thank you so much mr. stavro d'amore
     
  5. PipDog

    PipDog Corporal

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    RSL,

    I'm also short AU at just above 1.075. My decision to take this was more about the stock market setup for a correction. If they actually drop the interest rate to 4, that should help our position. I expect stocks to trend down all week...and the AU should follow along. I'll probably take profit on half my position at 1.065...then get typically greedy.

    Good luck!
     
  6. RahmanSL

    RahmanSL Major

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    Good for you Pipdog ;) ......also I read somewhere that there were some bad economic news coming out from Aussie land help pulled down the AUD.

    I closed out all my AUD/JPY & AUD/CHF positions earlier on today, and the last AUD/USD at 1.0705 (which i should have held for just a little bit longer). I never thought of closing half of that position and then be really greedy on the other half :p....but will remember to do that next time!

    Ok, good luck to your "greediness" and hope you get a big chunk out of that ;)
     
  7. PipDog

    PipDog Corporal

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    I usually get greedy once I'm in profit, but only with 'house money'. Try not to let a good trade go bad.
     
  8. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Great trade! Pre news was good, But also spike was fantastic. here are the spike results.

    1123aud.
     
  9. PipDog

    PipDog Corporal

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    That Was Great!!


    Now that's how a surprise announcement is supposed to work.

    I traded the spike...I closed my short position on the BUY. Took profit on my short (7 pips) and got 33 pips on my long. Then went short again @ 1.0801. Bought back half at 1.776 and I'm holding half hoping for a stock market tank. We'll see.

    Hope everyone else got in on the fun!
     
  10. I-ching

    I-ching Recruit

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    Got the spike took 90 pips closed at 1.0800 then took a short. I'll buy at 1.0750 expecting a decent bounce there. I haven't seen any reason to short the AUD long term I was actually thinking a re-test of 1.10 is very likely. It might reverse a few months from now we'll have to wait and see what the fundies bring.
     

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