How to Trade News Events – The RBA & RBNZ Interest Rate Decision
Hi Traders,
We’ve had a great result on our USD/JPY trade from last week, and it’s still live and doing very well; so, for the first article of this week, we would like to share with you yet another trading set up.
This time Platinum Traders are looking again at a cross pair. One which many people take for granted, but moves nicely and according to our Platinum Trading rules.
The US Dollar seems to be exhausted. After so many fundamental events in the past couple of weeks, and many events supporting it, the Greenback is showing signs of tiredness and can’t break important key levels. In times like this, the best we can do is look at cross pairs which won’t be directly impacted by the US Dollar.
The AUD/NZD is one of the pairs we’ve been patiently keeping an eye on for some time, and it has finally presented an interesting set up for Platinum Traders. This week, the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) will be deciding their Interest Rates, we could see some nice volatility on this cross pair, and so our trade comes into play.
Let us remind you of a wise old phrase:
“The trend is your friend until the end when it bends.”
Let’s take advantage of the trends which have started to form recently in the Forex World and flow with the markets to make our money.
FUNDAMENTAL POINT OF VIEW ON AUD/NZD:
Both the RBA and RBNZ must be very pleased with the most recent surge in the US Dollar which weakened their currencies.
New Zealand had its general elections recently and a new Labour-led government is very likely to shake things up a bit and change the Central Bank’s mandate. The interest rate currently stands at 1.75% since 2016 and is expected to continue unchanged. The Kiwi Dollar (NZD) sank on the results of the general elections and placed in a weak position against its rival, the Australian Dollar (AUD), as you will see soon in our chart.
Australian inflation dipped unexpectedly in the 3rd quarter of 2017, with retail sales printing its weakest quarter since 2010. Even though the RBA has been sending out dovish comments and even a possible cut in the Central Bank’s rate as a possibility, the soaring household debt in Australia will make RBA think twice before cutting rates. The current 1.5% rate is widely expected to remain unchanged.
TECHNICAL POINT OF VIEW:
From the Daily chart below, we can see the AUD/NZD is in an uptrend. The momentum for this cross-pair is Bullish. We have an opportunity to join the flow here and long this market @ 1.1025 which is the confluence of the previous resistance becoming support, a double Fib confluence with a pullback of the last swing high to low with an anticipation of a 4th touch on the ascending trending line. Platinum Traders will be waiting for that pullback to complete, and enter the trade at the perfect price. Another sea of confluences is in our favour on this setup.
HOW TO TRADE THE AUD/NZD:
- Long the AUD/NZD @ 1.1025 with a 60 pip stop loss and a target of 1.1260
KEY TECHNICAL LEVELS ON AUD/NZD:
- 1285 – Medium-Term Selling level
- 1025 – Long-Term Buying Level
- 0940 – Medium-Term Buying Level
- 0860 – Long-Term Buying Level – Platinum’s Premium Fib level
- 0465 – Short-Term Buying Level
- 0590 – Long-term Buying Level
How to become a Profitable Trader:
If you are a new trader and would like to learn how to trade, then sign up today to our 2-day free Foundation to Forex Trading Course. Every month we receive a lot of inquiries on learning how to trade the financial markets. This is our way of answering those calls. You’ll get time to speak to a professional Forex Trader, who can show you just how easy it can be to trade the Financial Markets. Sign up today and we can get you on the path to becoming a successful Financial Trader.
Hopefully, you have enjoyed today’s article and have gained some great knowledge about how to trade.
See you soon!
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
THE PLATINUM WAY
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Download our free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Nisha Patel
Live from the Platinum Trading Floor.