1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Forex Signal (Thu January 13 2011, 7:45am NY Time EST) - EU ECB Interest Rate

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jan 13, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Joined:
    Jul 5, 2010
    Messages:
    473
    Likes Received:
    0
    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. As all 53 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
    Since the main focus of ECB Rate decision is usually on the press conference scheduled 45 minutes later, it is important to understand that the press conference is delivered in 2 parts: The first part is the prepared statement by Trichet and copy of the statement will be available on ECB's official website. Then it will be followed by a Q&A session, where onside media members will have a chance to ask questions, market reaction is usually unpredictable, therefore it is best to stay out of the market during the entire press conference.

    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,


    [​IMG]
     
    #1 Henry Liu, Jan 13, 2011
    Lasted edited by : Sep 8, 2016

Share This Page