TRADING INTEREST RATE DECISION WITH PRECISION AND PROFITABILITY

INTEREST RATE DECISION

Good Morning,

Platinum Subscribers

When you look at the world markets and the policies that are currently dictating the interest rate decision, all of them are on the verge of making serious moves. Interest rate decision normalisation is long overdue, for the last 9 years at least, there have been negligible moves that have not impacted the forex market, except for one comment from the fed which led to a 1,500 point drop on the Dow Jones, leading all the other indices to follow suit.

Trading News Events is one of the most successful ways to trade in the foreign exchange market, and the interest rate decisions are one of the most important news events in the financial world beside NFP. By keeping up to date with your forex calendar, you will maximise your opportunities to trade the news and move forward as a foreign exchange trader.

So, let’s take a brief look at what is going on with the interest rate decision and the forecasts of the different currency pairs moving forward:

The Great British Pound Vs. The U.S. Dollar – GBP/USD

THE CURRENT INTEREST RATE: 0.50%

Another term for the Great British Pound Vs the US Dollar (Sterling) is cable, and what a beautiful run this particular currency pair has had over the course of the last 4 months. When it comes to interest rates, nothing is fixed or written in stone, but the analysts at Platinum predict that there may be at least 1 or 2 interest rate hikes well on their way. Currently, Cable is stuck in a trap range, and we should be looking to adapt to the market, trading the range with Fib perfection and also utilising our Trap Zone Strategy.

QUICK TIPS:

  • As long as Cable holds at the 1.3580 level, the Bulls are in charge
  • Longer Term Trend-line from March 2017 is still currently in play
  • If the 1.3350 level is broken on Cable, the Bears will be back in charge

The Euro Vs. The U.S. Dollar – EUR/USD

THE CURRENT INTEREST RATE: 0.00%

The euro has only acted upon the dollar weakness in the last 6 months after a whole predicted bear year the dollar is the main catalyst in saving the euro in our opinion. The ECB is in no position to turn the game around when it comes to an interest rate decision. The analysts at Platinum predict there will be no interest rate increases for the year of 2018.

The Euro, just like Cable is stuck in a trap range and we should be adapting to the situation, trading the range with Fib perfection and using our Trap Zone Strategy.

QUICK TIPS:

  • As long as the Euro holds 1.2040, the Bulls are in charge
  • Longer Term Trend-line from April 2017 is still currently in play
  • If the 1.1920 level is broken on the Euro, the Bears will be back in charge

The Australian Dollar Vs. The U.S. Dollar – AUD/USD

THE CURRENT INTEREST RATE: 1.50%

As always, we prefer a shorting position on the Aussie than long positions, as the price is no-where near the fair value of the currency. We have not seen much movement in the interest rate decision since July 2016, and are very doubtful that there will be any changes in the year of 2018, albeit there are market rumours of interest rate decision increases in the 4th quarter of 2018.

The Aussie is in Bear mode and if our prediction is correct and the indices fall, then the Aussie will follow suit. We should only be online trading the Aussie in one way, and that is short at the present moment in time. Retracement Shorts are the way forward, and if you wish to have a look at how the Platinum Trading System can assist you in bear markets, then book a session here.

QUICK TIPS:

  • As long as Aussie Resistance is at 0.8130, the Bears are in charge
  • We currently have a triple Top Formation in play
  • The analysts at Platinum believe that 0.7500 is on the cards, just look for shorting opportunities

SEE HOW PLATINUM PREMIUM CLIENTS USED THE NEWS TO NET 622 POINTS IN THE MARKET

Trading Interest Rate Decisions is one of the best Forex Trading Strategies in the market and this is true because you can never miss either a trade or the event as both are 99% fixed. If you just traded these rate decisions through the year, you could easily take home over 3,000 pips.

Let’s look at the way, for example, a fed decision is supposed to be traded:

Name of Event: FOMC Interest Rate Decision

Time of the interest rate decision: 19:15

Currency Pair to trade on the day: EUR/USD

Only three trades to take on that particular day:

The Euro moves +75 pips prior to the move at any point in the day short the pair or go long on the pair with a 25 pip stop loss and 40 pip target.

When trading the news, it’s important to make sure you have a high level of awareness of news events and other economic releases, major currency pairs can shift by large amounts depending on many different varieties of economic data. These economic news releases provide magnificent short-term trading opportunities, provided you have trading strategies in place and are keeping watch of the economic calendar to know exactly when central banks are making scheduled announcements, when the Bureau of Labor Statistics releases its non-farm payroll statistics, and other major events.

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INTEREST RATE

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I hope you found this blog informative and it assists you in trading the market with confidence.

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

Have a fantastic day!

Nisha Patel

Live from the Platinum Trading Floor.

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