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Forex News Trading Strategy For The Week 26
Forex News Trading Strategy For The 27th June – 1st July
This week we will have the fallout from last week’s historic ‘Brexit’ vote that came out of the UK. We expect the volatility to last throughout the week as the markets try and determine what the long term impact of the vote will be and how this will effect the UK economy but in the short term we do have a few key risk events coming up that could potentially give us some trading opportunities.
On Tuesday we have final GDP from the US. The forecast is that this figure will come out better than previous which also matches the general picture of support for the USD over recent weeks. We expect that this figure will add to that USD support and anything even better than the expected figure could present a nice opportunity to make some pips buying the USD in the very short term too.
We also have consumer confidence coming out which is also expected to support the USD with a positive reading in relation to the previous one.
On Wednesday we have the core PCE price index reading, which is also from the US. This is the preferred measure of inflation used by the Fed to track the US economies health and determine the future path of monetary policy. The markets generally tend to place more attention to the core CPI readings but it is definitely worth watching. This is expected to come out pretty much the same as it did previously.
As the week starts to draw to a close on Thursday we have a few events that could possibly give us a trading opportunity if they deviate significantly from what the market is currently expecting. If EU data produces any rallies then we could use these boosts in price as selling opportunities given the fact that there are a lot of reasons to sell the single currency right now, and the big picture is extremely negative and uncertain.
The week closes on a slew of Japanese data that could be very interesting for the next policy moves from the Bank of Japan. They have stated clearly that they are ready to act again should the current uncertainty coming from the ‘Brexit’ vote continue to strengthen the Japanese yen. This strengthening occurs because the Japanese currency is seen as a safe haven during times of uncertainty.
The inflation readings from Japan have not been anywhere near where the bank wants them, so more bad readings here, as expected, coupled with extra buying of Yen from speculators looking for safety could encourage action from the bank which ultimately should lead to a further weakening in the medium term.
So the general theme of the coming week is to be looking at risk events as they are released and trading any that show a significant deviation so that we can look to trade out of them in the very short term.
Of course while all of this is playing out, be very mindful of the current volatility due to last weeks ‘Brexit’ vote that could see significant moves on both Euro and GBP.
Other Forex news trading events taking place this week can be found here: Forex Factory Calendar.
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