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Forex Signal (Thu May 5 2011, 7:45am NY Time EST) - EU ECB Interest Rate Statement

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 4, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
    Likes Received:
    ECB (European Central Bank) will be rendering its rate decision today, and it will have a pivotal short term impact in the Euro dollar. However, it is widely believed that ECB will keep rate unchanged at 1.25%… Here’s the forecast:

    7:45am (NY Time) EU ECB Rate Decision Forecast 1.25% Previous 1.25%
    ACTION: EUR/USD BUY 1.50% SELL 1.00%

    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 25 basis points or more, then expect market to go into shock 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.

    Of course, if ECB decides to leave rates unchanged at 1.25% as expected, then we should stay out of the market.

    For more information on my trading methods, please read:
    Henry Liu's Trading Method

    The Market
    As usual, the real event for ECB rate meeting is the Press Conference at 8:30am. The ECB has denied their decision on a series of planned interest rate increases, but if the bank is looking to increase rates at the June 2011 meeting, then they will certainly signal this in advance during the press conference. However, since the press conference 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).

    Here’s the link to watch the Webcast Live at 8:30am EST.

    The chances of a rate hike for this quarter are unlikely but the ECB will reveal some indicators for future plans.

    Additional Thoughts
    It is important to understand that ECB 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 Chart and Data for EU ECB Interest Rate Statement


    #1 Henry Liu, May 4, 2011
    Lasted edited by : Sep 8, 2016
  2. yurps

    yurps Private

    Dec 10, 2007
    Likes Received:
    Don't fight the Trend

    Henry one of your 10kto1mm paying subscribers told me you were long USDJPY when the Japanese earthquake hit....I can only imagine the heart palpatations you and your members experienced as it dropped 100's of pips....well I guess it wasn't so bad for you since you make most of your money from subscriptions.

    But then I also heard you have been shorting the AUDUSD saying it is overbought and that the larger trend is down...again I can't imagine the bad heart condition you have caused your subscribers as Beranke again talked down the Greenback and the aussie his 1.1

    I have come to the conclusion that this is part of your business plan, if u can put your members into a drawdown, then you can ensure they continue to subscribe so they can 'spend quality time with their family" while u tell them what to do.

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