Getting ready for a busy day and not going against the market
Today may well be a day of high volatility in the financial markets as a result changes in prices for several financial assets.
There are a lot of important macroeconomic statistics will be published today. In particular, a whole block of data will be released across the UK, including GDP in August, industrial production, the index of business activity in the service sector, as well as the trade balance. So at 11-30 in pound pairs most likely it will be intense.
As for the unstable pound we recommend practising news trading today. 1-2 minutes before the news release, we place pending stop orders, both for purchase and for sale, at 20-25 points from the current price of GBPUSD at that time. Well, then we just wait. Positive news is likely to provoke a growth, while negative news will lead to sales. Accordingly, one of the pending orders will react. Well, then it is only a matter of time and patience.
Apart from data from the UK, inflation statistics from the United States is also we are interested in. Recall, 2% is the Fed’s target, accordingly, while inflation is below this mark, the Fed could cut the rates. We also do not forget that the Central Bank has at its disposal other instruments for expanding/narrowing the money supply.
From the latest news, it is worth noting the Federal Reserve will soon purchase of US Treasury bonds. That is, the program to reduce the balance is over and the Fed's balance sheet begins to expand. Yesterday, the minutes of the last FOMC meeting was published. There is no unity in the Fed regarding the monetary policy vector. The distribution of votes “in favour” and “against” the reduction of the rate 50/50.
The growth of the dollar supply in the market is a strong bearish signal. So the markets to finally begin to sell off the dollar the confirmation in the form of weak inflation is needed. So today's data is extremely important and can provoke strong movements in dollar pairs.
But the main focus of the markets today is on negotiations between the US and China. If they fail, then the safe haven will be very volatile. If negotiations succeed, oil price may soar, while gold and the Japanese yen will be sold off. In this light, the main rule of today is not to go against the market. The movement can be very strong and unidirectional. Accordingly, trading in the direction of travel, especially if there is a fundamental reason for this, is the best option for trading today.
There are a lot of important macroeconomic statistics will be published today. In particular, a whole block of data will be released across the UK, including GDP in August, industrial production, the index of business activity in the service sector, as well as the trade balance. So at 11-30 in pound pairs most likely it will be intense.
As for the unstable pound we recommend practising news trading today. 1-2 minutes before the news release, we place pending stop orders, both for purchase and for sale, at 20-25 points from the current price of GBPUSD at that time. Well, then we just wait. Positive news is likely to provoke a growth, while negative news will lead to sales. Accordingly, one of the pending orders will react. Well, then it is only a matter of time and patience.
Apart from data from the UK, inflation statistics from the United States is also we are interested in. Recall, 2% is the Fed’s target, accordingly, while inflation is below this mark, the Fed could cut the rates. We also do not forget that the Central Bank has at its disposal other instruments for expanding/narrowing the money supply.
From the latest news, it is worth noting the Federal Reserve will soon purchase of US Treasury bonds. That is, the program to reduce the balance is over and the Fed's balance sheet begins to expand. Yesterday, the minutes of the last FOMC meeting was published. There is no unity in the Fed regarding the monetary policy vector. The distribution of votes “in favour” and “against” the reduction of the rate 50/50.
The growth of the dollar supply in the market is a strong bearish signal. So the markets to finally begin to sell off the dollar the confirmation in the form of weak inflation is needed. So today's data is extremely important and can provoke strong movements in dollar pairs.
But the main focus of the markets today is on negotiations between the US and China. If they fail, then the safe haven will be very volatile. If negotiations succeed, oil price may soar, while gold and the Japanese yen will be sold off. In this light, the main rule of today is not to go against the market. The movement can be very strong and unidirectional. Accordingly, trading in the direction of travel, especially if there is a fundamental reason for this, is the best option for trading today.
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