Still in my holiday mood, tracking the path of EURUSD, only to find out that the pair broke out of a very-tight range in the Asian session (Friday) and rose as high as 1.3315(?). There are lot of dollar-bearish news right now, but I will concentrate on CPI news at 8.30 Malaysian time. How to trade this news anyway?
The US CPI report produces relatively straightforward reactions. For the upcoming report, traders will likely pounce on any disappointments and challenge stiff resistance in the EURUSD pair. If both headline and Core CPI print below consensus forecasts, it may provide just the catalyst needed to send the EURUSD above 2006 high at 1.3352. To trade such a result, it is best to wait five minutes to confirm direction in USD-denominated currency pairs. After five minutes, the trader can go long the EURUSD with a stop-loss below the post-news price low.
If, on the other hand, Core and Headline price growth comes in higher than forecast, we could see the 1.3270 as a support. In this case, the trader would wait five minutes to place a short order with a stop-loss above post-news highs.
See ya!
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