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Forex Signals (Wednesday April 18, 2012 NY TIME 4:30am EDT NY TIME) – UK MPC Meeting Minutes

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Apr 18, 2012.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

    Jul 29, 2011
    Likes Received:

    Today we have UK MPC Meeting minutes, please see my trade plan below.

    UK MPC Meeting Minutes
    Forecast: 0-0-9
    Previous: 0-0-9
    Pair to trade: GBP/USD

    The numbers we will look for:
    BUY GBP/USD if we get 3 Votes for hike
    SELL GBP/USD if we get 2 Votes for quantities easing

    Economical Impact: High (will bring strong volatility to GBP pairs)
    Typical Result: More hawkish than expected is good for currency
    Occurrence: Released monthly, 13 days after the Official Bank Rate is announced

    About our Triggers:
    The breakdown of the MPC member’s interest rate votes tends to be the most important part of the minutes. The vote is reported as X-X-X format, we are currently on 0-0-9 forecast and previous was also 0-0-9.
    The first number is how many voted to increase rates.
    The second number is how many voted for a rate reduction
    The third number is how many voted to hold rates.
    If we get 3 votes for an increase (which is very unlikely) we will immediately BUY GBP/USD. If we get 2 votes for quantities easing we will sell GBP/USD. Should the vote remain the same, I will not enter this trade on any retracement due to uncertainty and other comments that could have been circulated during the MPC meeting.

    What is it?
    Monetary Policy Committee (MPC) Meeting Minutes are a detailed record of the committee's interest rate meeting, held about two weeks earlier. It gives us a good indication and a picture of economic conditions in the UK. If the BOE is hawkish about the inflationary outlook, it should be taken as positive/bullish for the GBP.

    Why does the market care?
    It is a detailed record of the BOE MPC's most recent meeting, providing in-depth insights into the economic conditions that influenced their vote on where to set interest rates and offering clues on the outcome of future votes.

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

    See my Euro Crisis Views
    Euro crisis

    Approximately 5 minutes prior to the news release I will be looking for a short term LONG position using GBP/USD pair. I would be out of this LONG trade 1 minute before the actual release, or to avoid any spreads that should widen. As the pound is well supported by the UK Consumer Price Index (CPI), I will only look at long GBP trades.

    I do NOT recommend spike trading as an option for this release.

    Historical Chart and MPC Meeting Minutes

    All the best

    Stavro D’Amore

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