Next week is going to be interesting for enthusiasts of fast news trading.
The update of macroeconomic data is about to happen in the following countries:
Australia:
United Kingdom:
* Manufacturing Production (MoM)
These events have performed well when trading on the news.
So, what is the trading plan?
All the mentioned indicators, except for unemployment rates in both countries and BoE’s interest rate decision, imply the same strategy (M15 timeframe):
- In case of indicators growing, buy currency pairs (to your preference) with a national one as a base, and sell those, where the national currency is in the denominator.
- In case of indicators dropping, sell currency pairs with the national one as the base, and buy those, where the national currency is in the denominator.
The opposite plan is used for unemployment rates:
- In case of indicators growing, sell pairs with the national currency as the base, and buy pairs with the national currency in the denominator.
- In case of indicators dropping, buy pairs with the national currency as the base, and sell pairs with the national currency in the denominator.
As for the BoE’s interest rate decision, the next steps come into play:
- In case of the rate hike, after one hour of data release buy currency pairs with the national one as the base, and sell pairs with the national currency in the denominator.
- In case of the rate cut, after one hour of data release sell currency pairs with the national one as the base, and buy pairs with the national currency in the denominator.
For instance, if Australia's unemployment rate rises, sell AUDUSD, AUDJPY, buy EURAUD, GBPAUD.
Close the trades:
- after 1 hour for interest rate, estimated asset acquisition, votes for the rate rise and unemployment rate in the UK;
- after 3 hours for industrial production and manufacturing production in the UK;
- after 8 hours for Australia's unemployment rate and votes for the UK rate cut.
Stop Loss is set below the previous day's minimum for purchases and above the previous day's maximum for sales.
Pay attention to the spread and money management rules!
Risk disclosure!
Trading on financial markets involves a high level of risk and may lead to the loss of investment capital. The MarketCheese team is not responsible for the possible loss of your investment funds.
This content is for informational purposes only and is not intended to be investing advice.
