I just wanted to share this video from the Australian CPI q/q release on 7/27, this is a news event that could change the long term trend for the AUD.
Far too many traders focus just on the technical aspect of trading, and those who do news trading, only focus on the short-term, or the first 30 minutes after the release. But the real potential for a news release such as the CPI is the long term effect, and it could generate hundreds of pips in the next few days/weeks. (Even if AUD/USD remains resilient, at the time of writing this analysis, AUD/USD has already dropped below the 0.8900 once, giving up at least 50+ pips of profit from my original entry.)
In this video I showed my entry, my analysis, and what to expect in the next week or so. This is the type of trade that I prefer, and I hope you guys enjoy this brief analysis. Due to the video limitations on Youtube, I have to cut down this release to under 10 minutes, but I’ll give you guys a brief rundown here:
AUD CPI came out worse than expected at 0.6%, the yearly CPI is at 3.1%, which is right around RBA’s inflation target. Credit Suisse is pricing in about 31% of rate hike on August 3 pre-release, now the probability of a rate hike has dropped down to under 11%. Basically it means RBA will not hike rates, at least not during this meeting.
This new development gives us a new opportunity, as if there are no expectations for a rate hike, market is not likely to hold on to the AUD. From now until the rate decision, we could see AUD/USD drop to the 0.8650 level, and all we need is another news catalyst to push that… So by understanding the fundamental implications, you can:
1. Stay on the right side of the market.
2. Take advantage of this sentiment and SELL AUD.
So I hope this pretty much explains it.
In my opinion you don’t need a degree in economics to be able to take advantage of fundamental analysis. All you need to know is what news releases you should pay attention to, and I’ll try to point them out to you. If you keep an open mind and see the nature of the market, you’ll soon realize that it is not as random or unpredictable as you might once thought.
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