AU RBA Interest Rate | November 5, 2012 | Forex Trading Plan

Event Details At-A-Glance:
3.25%3.00%3.25%0.25%

RBA (Reserve Bank of Australia) is expected to keep its borrowing costs unchanged at 3.50% as per general market consensus, this is following last meeting’s decision to also keep the rates unchanged…

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Here´s the forecast for this news release:
10:30pm (NY Time) AU RBA Rate Decision Forecast 3.00% Previous 3.25%
DEVIATION: 0.25% (SELL AUD 2.75% / BUY AUD 3.25%)

The Trade Plan
If RBA decides to cut interest rate, we will stay out… If RBA decides to keep rates unchanged, we’ll BUY of AUD as market expects a cut. Ultimately we are neutral to slightly bullish on the AUD as AUDUSD has risen from recent low levels and could continue after today’s rate decision, especially considering the potential for more economic stimuli from China. With China likely to cut its RRR or benchmark interest rate soon, RBA has slight higher probabiliby of an upside move after the decision today, regardless of the outcome…

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Important Note: The only time I´d recommend a spike trade is when there are so much momentum pushing this currency that regardless of spread and slippage, you should end up in profit if you just hold on to the trade. For more information on my trading methods, read:
http://www.currencynewstrading.com/how-to-get-started-with-news-trading/

I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: AUDUSD.

 

 

   

Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.

Definition:
Australian interest rate is often refers to as the “cash rate target”, also called the official cash rate (OCR) or cash rate. This is the Australian base rate. Banks pay this interest rate when they take out a loan with a maturity of 1 day from another bank. By buying or selling bonds and other securities issued by the government the RBA can influence the money supply and thus the cash rate target. A rise or fall in the cash rate often also leads to a change in the interest rates for mortgages, loans and savings.

Sincerely,




Currency Pair Stats
Pair2H50+2H50RangeDirectionPN30PN60PN90Spike
AUDJPY36.7%50.0%4798.0%12172222
AUDUSD37.8%66.7%4598.0%10141724
2H-50+ = % of 50+ pips move in 2hrs. | 2H-50 = % of 50+ pips move in 2hrs. for the last 2 years | Range = average range in 2 hrs. | Direction = % match following news direction | PN30 / PN60 / PN90 = average pips move before news release in 30, 60, or 90 mins. period | Spike = initial average spike
About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

You can find more information about me on my Google Profile.

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