At the start of each trading session, I note down the news coming up for that session and for the rest of the week. Today we have the following Tier-1 news announcements:
9:30 am Tier-1 UK data (impacts all GBP cross rates)
12:45 pm European Central Bank (ECB) rate decision (potentially affects all instruments in all asset classes [fx, equity indices, commodities, treasuries [another name for treasuries is “fixed income” or “bonds”)
13:15 US ADP employment figures (impacts all USD crosses and other asset classes, as well as risk-on/risk-off sentiment)
13:30 US Tier-1 data (impacts all USD crosses)
13:30-14:15 ECB press conference including Q&A (potentially affects all instruments in all asset classes)
14:00 Bank of England governor Carney speaks
16:00 Weekly Oil Inventories – on Thursday this week because of US Memorial Day on Monday – impacts Oil, and Oil-dependent currencies i.e. AUD, CAD and NZD as well as equity markets
Late afternoon Bi-annual OPEC meeting report – impacts Oil, and Oil-dependent currencies i.e. AUD, CAD and NZD as well as equity markets
How does this impact on my trading approach for today?
In short, I won’t trade.
I am currently trading using the 1 hour timeframe. There is basically no point putting on any trades today because any of these news announcements has the potential to trigger significant volatility in the financial instruments. [I do still have a open position from yesterday’s session, am long EURGBP from 0.7716 – so it’s up 43 pips – with a target of 0.7784 – I will let that do its thing, and close it at 12:30pm].
I would say the same goes for people trading from the 15M and 30M timeframes.
Possibly trades using the 5M could have a trade.
It should be a field day for traders who like trading news events. It should also be a field day for retail brokers because their huge number of retail clients love volatility and will dump a lot of cash in commission and trading losses to the broker (yes, many retail brokers take the other side of the trade – it is standard practice).
Oh yeah, and then tomorrow there is the monthly US employment report (or “Non Farm Payrolls”, “NFP”)…