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Forex Signal (Thursday November 10, 2011 NY TIME 7:00am EDT) – UK BOE Interest Rate

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Nov 9, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Joined:
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    Hello all,

    Hope your all well! Today we have UK BOE interest rates could defiantly be a surprise so be there for the action don’t skip this one.

    UK BOE Interest Rate
    Forecast: 0.50%
    Previous 0.50%
    Pair to trade: GBP/USD
    Estimated Pips: 50 on Initial Spike

    The numbers we will look for:
    BUY GBP/USD if we get 0.25%
    SELL GBP/USD if we get -0.25%


    Economical Impact: Very High (will bring strong volatility)
    Typical Result: Good for currency
    Occurrence: Released monthly


    About our Triggers:
    It is unlikely the BOE will hike rates to 0.75%. We will BUY GBP/USD as per my method of trading below.
    The same rule will apply if the BOE suddenly decides to lower the rate, which is very highly unlikely. Should the BOE decrease rates, please look for a short term possible SELL of the GBP/USD pair.

    If our tradable releases are reached, there is a good expectation that the market will move 60-70 pips within 2 spikes in the first 15 minutes, after news release.

    What is it? Why does the market care?
    The Bank of England (BOE) decision on short term interest rate. The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency.

    A higher than expected rate is positive/bullish for the GBP
    A lower than expected rate is negative/bearish for the GBP



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

    See Felix Descriptions

    I would recommend spike trading as the best option when there is great uncertainty in the markets; also the liquidity is very good at the moment if you are using an ECN broker.

    I will look for a 30% retrace in the original spike before entering a trade.
    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 entry price. My TP level would be just before a resistance level, or if the chart decides to form a level looking at a 15 minute time frame. If my triggers are hit, I will definitely try to run this for over 120 minutes, depending on current market volume and to do this I will look for a choppy volume (if you’re using MT4 you would look for the volume bar tab).

    Should there not be a retrace in the original spike, I will wait for a retrace in the second spike, the time frame I will look at on the charts will be set on 5min.

    Historical Chart and Data UK Interest Rate Decision

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Nov 9, 2011
    Lasted edited by : Sep 8, 2016
  2. Tijl Uilen

    Tijl Uilen Recruit

    Joined:
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    Hi. I have noticed one thing about your prognoses - you do not mention the possible outcome if there is no change in value. As you probably know in this case the fact that BOE left the same rate had a positive impact on GBP/USD. It was possible to score some good pips - the rate climbed around 70 pips within one hour after the news.

    Maybe there is some reason you ignore such cases?
     

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