Henry Liu
Former FPA Special Consultant
- Messages
- 473
ECB (European Central Bank) will be rendering its rate decision today, it is widely believed that ECB will keep current rate unchanged. Here’s the forecast:
7:45am (NY Time) EU ECB Rate Decision Forecast 1.00% Previous 1.00%
ACTION: EUR/USD BUY 1.25% SELL 0.75%
The Trade Plan
ECB rate decision comes in two part, the first one is the 7:45am rate announcement followed by the 8:30am Press Conference where ECB chief Trichet issues the official statement on this rate decision. Since it is extremely unlikely to get a surprise from ECB, there is usually no volatility following this release, and our time is better served to focus on Trichet’s speech in 45 minutes.
However, in the unlikely event that ECB surprises the market by hiking rates unexpectedly, then expect market to go into a buying frenzy for EURUSD and we should jump in immediately on a spike trade because no matter what the slippage or spread is, we will end up making positive pips.
However, if ECB decides to keep rates unchanged (99.99% possibility), then we should stay out of the market.
For more information about my trading methods:
Henry's News Trading Method
The Market
ECB (European Central Bank) is likely to once again leave its minimum bid rate at 1.00% or unchanged this month. The majority of analysts agree on this scenario.
The real event will be the Press Conference at 8:30am. However, since this is beyond the scope of news trading and into advanced market interpretation, I'm going to advice everyone to stay out of the market until Trichet finishes his press conference (usually within 1~2 hours).
Additional Thoughts
Considering that ECB is not in the habit of surprising the market because any surprise on the world’s most traded currency pair (EUR/USD) would upset economy, therefore I expected everything to be released as expected…
Of course, I suggest that we stick around during the release just in case ECB decides to surprise the market, but most likely we won’t see much of a market volatility…
Pre-news Consideration
There should be no pre-news consideration for this particular release, as the real event will be Trichet Press Conference at 8:30am.
Historical Data & Chart For ECB Minimum Bid Rate Decision
Thanks,
7:45am (NY Time) EU ECB Rate Decision Forecast 1.00% Previous 1.00%
ACTION: EUR/USD BUY 1.25% SELL 0.75%
The Trade Plan
ECB rate decision comes in two part, the first one is the 7:45am rate announcement followed by the 8:30am Press Conference where ECB chief Trichet issues the official statement on this rate decision. Since it is extremely unlikely to get a surprise from ECB, there is usually no volatility following this release, and our time is better served to focus on Trichet’s speech in 45 minutes.
However, in the unlikely event that ECB surprises the market by hiking rates unexpectedly, then expect market to go into a buying frenzy for EURUSD and we should jump in immediately on a spike trade because no matter what the slippage or spread is, we will end up making positive pips.
However, if ECB decides to keep rates unchanged (99.99% possibility), then we should stay out of the market.
For more information about my trading methods:
Henry's News Trading Method
The Market
ECB (European Central Bank) is likely to once again leave its minimum bid rate at 1.00% or unchanged this month. The majority of analysts agree on this scenario.
The real event will be the Press Conference at 8:30am. However, since this is beyond the scope of news trading and into advanced market interpretation, I'm going to advice everyone to stay out of the market until Trichet finishes his press conference (usually within 1~2 hours).
Additional Thoughts
Considering that ECB is not in the habit of surprising the market because any surprise on the world’s most traded currency pair (EUR/USD) would upset economy, therefore I expected everything to be released as expected…
Of course, I suggest that we stick around during the release just in case ECB decides to surprise the market, but most likely we won’t see much of a market volatility…
Pre-news Consideration
There should be no pre-news consideration for this particular release, as the real event will be Trichet Press Conference at 8:30am.
Historical Data & Chart For ECB Minimum Bid Rate Decision
Thanks,
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