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Forex Signal (Monday October 31, 2011 – 11:30pm EDT) – AU Interest Rate

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Oct 31, 2011.

  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 intrest rate drop is on the cards. Please find my trade plan bellow.

    AU Interest rate
    Forecast 4.75%
    Previous 4.75%
    Pair to trade: AUD/USD

    Numbers we need:
    BUY AUD/USD 5.00% or greater
    SELL AUD/USD 4.50% 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 50 pips on initial spike

    About our Triggers:
    If RBA increases interest rates, we should SPIKE in AUD of 50 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 50 pip spike to the down side with AUD loosing over 200 pips by weekend

    Current pressure from the government’s new carbon tax, poor performing markets and pull back in the housing market of 20%. We could also see rates decrease.
    RBA will make further statements after the release in the condition of the economy and there forecast this will make the AUD very volatile.

    If the RBA decides to keep rates unchanged, we may see a sell-off, as the accompanied RBA statement may be dovish in light of recent news events.

    What is it? And why does the market care?
    see Felix's Description
    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 1 hour 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
     
    #1 Stavro D'Amore, Oct 31, 2011
    Lasted edited by : Sep 8, 2016

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