Forex News Trading: Trades for Wednesday, March 18, 2020

NOTE: Forex Factory still shows the CAD and US trades an hour before they usually happen. Not sure why this is, but I would be ready to do them at the times Forex Factory says.

7:30 AM EDT
CAD CPI
USD/CAD

In December we saw a 0 deviation with a 4 pip spike.

In January we saw a 0 deviation with another 4 pip spike.

In February we saw .1 with a 6 pip spike. It barely moved for a few seconds, then spiked down 6 or 7 and retraced immediately.

The forecast is for growth of 0.4%, which is on the high side of the typical forecast. However it is unlikely there will be any movement at all no matter what the deviation is due to the craziness we are seeing in the world economies now.

No one would expect the BoC to raise rates in the future if it happened to come out high. Trade cautiously if at all. The odds of any move at all are very small no matter the deviation.

SETTINGS: Set buy/sellPips to 15 and get out if you aren’t live within a couple seconds.

1:00 PM EDT
US Federal Funds Rate
XAU/USD

None of the trades today are likely to have much movement at all, except for this one. And the movement could be pretty crazy. Here are the economists forecasts put out by Bankrate:

Leave the rate alone: 22%
Cut the rate by 0.25%: 11%
Cut the rate by 0.50%: 56%
Cut the rate by 0.75%: 11%

Another predictor I found shows the odds of a cut of at least 0.50% at 100%. And the odds of a cut of 0.75% at 67.2%.

Forex Factory has the expected forecast at 0.50%. But the diversity of opinion makes it impossible to forecast with any confidence what will happen. Traditional logic tells us that a 0.50% cut will be baked into the price. A 0.75% cut would cause a hard spike up and a cut of less than 0.50% would cause a hard spike down. No telling what will happen with a 0.50% cut.

I am now noticing this trade no longer shows up in Forex Factory as it did awhile ago but I can’t find anything saying it is postponed, so not sure what is going on.

If it actually happens, it could be quite volatile. In fact I would not trade it at all unless you have a no-slip broker. And even then trade lighter than you normally would for an interest rate release.

SETTINGS: For the no-slip broker, I will set buy/sellPips at 15 or so (to stay away from the spread) and set lot sizes at maybe half of what I would normally set them at for an interest rate trade. Since there is zero chance you won’t be live, no need to talk about that. Just hold on and see what happens.

4:45 PM EDT
NZD GDP q/q
NZD/USD

I don’t have any data for June or September.

In December we saw .2 with a 30 pip spike. Looks like it spiked up 30 and then retraced half way within the first minute and the rest of the way in about 15 minutes.

Looks like .2 is a good deviation, but I wouldn’t expect any movement no matter what the deviation is. Trade very conservatively if at all.

SETTINGS: Set buy/sellPips to 10 or 12. Get out if you aren’t live within a couple seconds.

7:30 PM EDT
AUD Employment Change
AUD/USD

In December we saw 25.4 and -.1 with a 10 pip spike. Spiked 10, pushed up a few more then back down past the entry to take both of mine out at 0, then pushed up about 10 more in the first minute. Very small move for a decent deviation.

In January we saw 16.7 and -.1 with a 35 pip spike. I missed this but the move was 35 pips in the first minute, retracing maybe 5 by the end of the minute. It crept up very slowly from there over the next 17 minutes.

In February we saw 3.5 and .1 with a 12 pip spike. It spiked 12 then retraced a few but pushed back down and I was at breakeven in about 5 seconds. It continued pushing down to a total of 15 then slowly started to retrace so I bailed for 8 pips of profit on one station.

The forecast is for 8.5k jobs, which is very low. With a huge deviation we might see a decent spike out of this one but if so, it will retrace very quickly. Trade cautiously, if at all.

SETTINGS: Set buy/sellPips to maybe 12 or so, and get out if you aren’t live right away. Even if you are, close quickly.

About Barry Battista

I am a software guy that started trading in 2006. I have been trading the news for a living ever since. Eventually I wrote some code to help a friend and I improve our odds, and gradually the software took on a life of its own. My intention is to adapt this trading style to the ever changing Forex markets to always provide the trader with the tools and information to give them the maximum odds of a profitable trade.
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