Forex News Trading AU RBA Interest Rate 03/05/12

au stevens Forex News Trading AU RBA Interest Rate 03/05/12RBA (Reserve Bank of Australia) is expected to keep its borrowing costs at 4.25%, as per general market consensus, after last meeting’s surprise decision of keeping the rates at the same level…

Here´s the forecast for this news release:
10:30pm (NY Time) AU RBA Rate Decision Forecast 4.25% Previous 4.25%
ACTION: AUD/USD SELL 4.00%

The Trade Plan
If RBA decides to keep rates unchanged, we will stay out of the market as today’s decision is based on unanimous consensus… If RBA cuts rates, we should also see a strong reaction in the market to SELL the AUD as the market will be surprised.

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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/

The Market
With RBA’s recent comments on “…rates appropriate” for the time being and the fact that AUD has been benefiting from recent round of risk appetite driven market, plus  a weaker JPY, it is very likely that RBA will once again keep the rates unchanged for this meeting…  In the long-term, RBA will definitely resume cutting rates, but for the moment AUD strength is more than enough to offset the slight rise in inflation, therefore we should not see a rate cut in this or the next meeting… in my opinion.

Additional Thought
AUD will probably not show much of retracement. However, beware of the “Buy on rumor, Sell on news” market condition should we get an as expected release.

Pre-Market Consideration
I’ll be looking to SELL AUDUSD on any significant gains today in anticipation of a rate cut.

Sincerely,

henry sig Forex News Trading AU RBA Interest Rate 03/05/12

Avatar of Henry Liu 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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