How to Trade News Events – The RBA & RBNZ Interest Rate Decision

Interest Rate Decision RBA (AUD) vs RBNZ (NZD)

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.

AUDNZDDaily - LTA 01.11.2017

HOW TO TRADE THE AUD/NZD:

  1. 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

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Hopefully, you have enjoyed today’s article and have gained some great knowledge about how to trade.

See you soon!

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Hopefully, you have enjoyed today’s article. Thanks for reading!

Have a fantastic day!

Clayton Diniz

Live from the Platinum Trading Floor.

Earnings Disclaimer:

The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. You have to do some work, use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.

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