Category Archives: Forex News

Today in forex news the Bank of England interest rate was cut, dropping interest rates from 0.50% to 0.25%. The Monetary Policy Committee left the door open to more cuts going forward. The cut was widely anticipated in this post Brexit business environment. So today, August 4, 2016 is the first Bank of England rate cut in 7 years.

For forex traders, Bank of England interest rate news can cause strong movements and formation of new market trends of the British Pound against the other major currencies we follow. The British Pound dropped strong against all 7 currencies we follow after the news today. The GBP/USD is at an intra-day low of 1.8240 and the GBP/NZD had an intra-day low of 1.7750. Most GBP pairs we follow remain inside ranges and clusters, but the GBP/NZD and GBP/JPY have broken short term support levels. A chart of the GBP/JPY is shown below illustrating the the intra-day price movement of over 200 pips.

We expect more GBP pairs to follow and form trends based on GBP weakness. The long term trends on the MN time frame on all of the GBP pairs continues to show GBP weakness. Today’s live sell signals from The Forex Heatmap ® forex heatmap are shown below to show the GBP sell off, along with the price chart movement after the Bank of England news announcement today. We will look to continue writing trading plans to sell these pairs in our daily trading plans, as the trends are now in place.

Forex news drivers like like the Bank Of England interest rate decisions can be profitable events for forex traders. If traders have the proper trading system, signal system and know the direction of the trends on the GBP pairs, they can successfully trade forex news in the direction of the trend.

Bank Of England Interest Rates

Bank Of England Interest Rates

In this article we will review and compare forex news calendars, and features that are available to traders. We will review what features and functionalities are best to have when selecting the best news calendar to meet traders needs.

A forex news calendar is an important tool for forex traders. If you combine a good quality news calendar with other tools listed below, a trader can be on the road to successfully trading forex news drivers. Traders will always be in front of the computer when news is potentially creating volatility and price movement.

Features to Look for In A Forex News Calendar

Some features in a forex news calendar are important to have, others we do not believe are needed. Probably the most important news calendar feature is the interface.  If an news calendar is easy to read, with well spaced text, and easy to read controls, The end user experience will be positive. News events should have color coding for better visibility.

Forex News Calendar Selecting

Most forex news calendars have a set of controls for customizing the news calendar features. With most calendars, traders can add or remove currencies that they want to see scheduled news drivers for. We suggest setting up the news calendar for reporting scheduled news drivers for the 8 major, most liquid currencies: US Dollar, Canadian Dollar, Euro, Swiss Franc, British Pound, Japanese Yen, Australian Dollar, New Zealand Dollar. These 8 currencies combine into 28 different pairs, and these are the pairs we track with the Forexearlywarning trading system.

Another calendar control or filter would be to set up the news calendar for the most volatile news drivers only. Look at the above news calendar. It has one volatile news driver on the schedule from the GBP that is upcoming. You can set up and customize the calendar to show only high impact news drivers, color coded in red. High impact news crivers can drive substantial price movement. You can also customize for red and orange color coded news drivers only. Orange news drivers are medium impact news drivers.

This way the calendar is more compact. Most forex news calendars also come with adjustable clocks. Users can set the calendar clocks to local time or the GMT time clock, whatever the end user prefers.

Make sure the news calendar you choose has a look ahead calendar for planning your trading week. Click on the “this week” to see the entire week of important news drivers on one screen. This helps with planning your trading schedule if you are on a tight schedule. You can also use the look ahead schedule to see when major bank holidays are. USA bank holidays are good days to take a day off from trading or take a long weekend. Every trader needs an occasional mental break.

Forex news Calendar Settings, Weekly View

Make sure the forex news calendar you are using is on a website that is fast and the pages load quickly on your laptop or any mobile device like Android or Ios device. Many news calendars have a lot of popup advertisements that make the pages load very slowly. Choose a calendar with little or no advertisements on the page to improve page loading speed on mobile devices.

Some news calendars have alert systems news alerts, alarms, and or apps. These features are fine but not necessary because you will always know when the important news drivers are in advance.  Traders can also use other professional forex alert systems with the news calendar to know when the market is moving on any pair.

How To Use A Forex News Calendar For Trading

A forex news calendar will pinpoint exact times to be in front of the computer in local time or GMT time clock. With this knowledge a trader can be in frot of the computer at the proper time for a potential trade and market volatility.

To complete your tool set for trading, you would need a forex trading demo account, an entry management confirmation system like The Forex Heatmap®, and a set of simple and easy to set up trend indicators. You can find all of these trading tools on the Forexearlywarning website and a demo trading account is available from any forex broker.

With this tool set you are ready to start demo trading, almost immediately. After any scheduled news driver on the 8 currencies we follow, you can check for consistent strength or weakness in one currency, then if the movement is in the direction of the major trends on the higher time frames, you can enter a demo trade.

JPY Weakness

If there is a JPY news driver on the news calendar, wait until the news is announced, then start monitoring the JPY for consistent strength or weakness using The Forex Heatmap forex heatmap, our real time trade entry indicator. If the signals are consistent JPY weakness then you can buy the USD/JPY or on of the other JPY pairs. Use the same strategy to buy or sell 28 different pairs. Ifthe USD/JPY is in an uptrend on the higher time frames, more pips are possible going forward.

Forex News Price Chart Movement

Forex News Calendar Selection

The news calendar selection process is simple. Just do a google search for “forex news calendars”. Some popular calendars will appear on the first two pages of search results. Dailyfx Babypips, Forexlive, etc. all have news calendars to review. Forexearlywarning also has a great world economic calendar on our website, along with the other tools like trend indicators, price breakout alerts, and The Forex Heatmap®, for trade entry management.  The documentation how to use these tools is also on our website. After reviewing some calendar options pick one you like that has the features you need.

Conclusions about forex news calendar selection: After you select the best news calendar for your needs, set up the features you like and you will have an important piece of your forex trading system. Then continue building your trading system and test the system with some demo trading. Then the final step is trading profitably with real money, micro lots and mini lots.

Today in forex news the  Bank of England base rate remained unchanged. The Monetary Policy Committee voted 8-1 to keep interest rates unchanged. The announcement came today at 1200 GMT.  The Monetary Policy Committee (MPC) also signaled that interest rates would remain low and steady. The central bank also lowered its economic growth forecasts.

The Bank Of England Base Rate news today caused the British Pound (GBP) to sell off, and this news impacted forex traders. The GBP/NZD sold off, due to some NZD (New Zealand Dollar) strength in the market. The GBP/NZD is hitting session lows at 2.2950, the overall sell off was nearly 400 pips, which is a very strong intraday selloff. The GBP also dropped against the USD, and this pair is down to session lows of 1.5120. You can see the strong selloff on the GBP/USD on the chart below.

Bank Of England Base Rate

Traders could have profited nicely after today’s news. Both sell trades on these two pairs look like short term/intraday sells, we expect the GBP/NZD to reverse back up based on the larger trends in the market. This pairs sold off but it is not trending down on the larger time frames. The GBP/USD also sold off, but this pair is still ranging up and down, so we would scale out lots or exit completely on any short term/intraday trades. The trading system you see above is The Forex Heatmap®, which provides live buy and sell signals for the GBP pairs and 7 other  currencies, and 28 pairs total. The Bank of England Base Rate news, or interest rate news on any currency is one of the criteria used for forex fundamental analysis for any currency. Interest rates drive currency price movement and trends. Monitoring forex news is part of any great trading system.

GBP/USD Sell Off After Bank Of England Base Rate News

Today in forex news the Chinese Yuan devaluation created strong movement and trading opportunities for forex traders. The Chinese Yuan (CNY) was allowed to appreciate 2% against the US Dollar (USD). The People’s Bank of China made this move due to the recent economic slowdown there, but was still very sudden and unexpected. This was the biggest one day drop in the value of the Yuan in 20 years. Chinese Yuan devaluation against the US Dollar by 2% is hoped to boost the Chinese economy.

This devaluation caused a strong reaction in the forex market. Currencies in the Asian region and currencies of Chinese trading partners were affected by the devaluation. The Japanese Yen (JPY), the Australian Dollar (AUD), and the New Zealand Dollar (NZD) were all affected by today’s devaluation. Most of the price movement and opportunities for forex traders today resulting from the Chinese Yuan devaluation were on these three currencies.

Chinese Yuan Devaluation, Impact On Traders

The AUD and NZD both tumbled on the Chinese Yuan devaluation news, but the Euro (EUR) also strengthened.  This produced strong movements in the EUR/AUD and EUR/NZD pairs. The EUR/CAD also moved up strong as all commodity based currencies reacted to the devaluation news.

The impact of the devaluation news can produce intraday or trend based trading profits for forex traders. As you can see below, the trading opportunities on the AUD pairs alone was significant. The live indicators shown below, The Forex Heatmap® indicated buy signals on the EUR/AUD, EUR/NZD and EUR/CAD for intra-day or potential longer term buys. All three of these pairs are currently in up trends. This is a valuable lesson on how scheduled or unscheduled forex news or global events can bring profits to any trader. Using this type of real time signal system is highly beneficial.

Chinese Yuan Devaluation

Chinese Yuan Devaluation AUDCAD

The movements shown are significant intraday price movements. A 1.69 percent movement in the AUD/USD is about 120 pips, and a 0.79% movement in the EUR/AUD is about 135 pips. Since the EUR/AUD is trending up on the higher time frames, traders can use the Chinese Yuan Devaluation news as and entry point into the trend. Traders can also move their stops to break even, thus preserving their upside potential for even more pips. All traders should consider using The Forex Heatmap® in their trading tool set, along with some simple forex trend indicators.

Currency Devaluations and Interventions

It is important to remember that government interventions and devaluations have been tried many times in the past with various currencies. These devaluations and short term price fluctuations are artificial, and usually short term, due to the high liquidity of currency markets. The overall market forces like the larger time frame trends and interest rate direction will always be the strongest guide for the direction of currencies like the Chinese Yuan, plus the 8 currencies we follow with our trading system.

In this article we will examine the various US Dollar USD news drivers, and how these economic news announcements impact currency traders on a day to day basis. We will also discuss several techniques for profitably trading these US Dollar news drivers.

There are various economic news events that drive movement on the US Dollar against other currencies. Currency traders watch these news drivers, looking for opportunities to buy or sell the major currency pairs for short term profits, swing trades, or longer term trend trading. See the example below of the world economic news calendar showing some scheduled US Dollar news releases. Some examples of the US Dollar news drivers include Purchasing Managers Index, Unemployment Claims, Crude Oil Supplies,  Non Farm Payrolls, and many others.

US Dollar News

Volatility and price movement in the forex market can be expected after most of the scheduled US Dollar news announcements. Some US Dollar news announcements like the Federal Funds Rate, Non Farm payrolls or the FOMC Statement can provide substantial volatility and price movement. Volatile US Dollar news announcements occur between 25 and 30 times per month, not to mention all of the volatile news announcements from the other seven currencies we trade. There are plenty of times throughout the month when traders should be watching the market around these US Dollar news announcements. The top 7 major currency pairs that can be traded that are influenced by US Dollar news include the USD/JPY, AUD/USD, NZD/USD, USD/CAD, EUR/USD, USD/CHF, and GBP/USD.

Example US Dollar News Announcement:

On Friday March 6, 2015, the non farm payrolls US Dollar news was announced, like it always is on the first Friday of every month. Non farm payrolls is a monthly statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics. Total non farm payrolls rose by 295,000 jobs for the prior month in February, shattering expectations for 235,000, resulting in the US Dollar strengthening. The employment situation report indicated that the February unemployment rate had fallen to 5.5%, down from January’s 5.7%.

How The US Dollar News Impacted Traders

After the non farm payrolls news driver the US Dollar (USD) strengthened on all pairs. Traders could have profited from the price movements that happened after the non farm payrolls news drivers, if they have access to real time professional tools. Check out the live indicator below, this is called The Forex Heatmap® forex heatmap. The heatmap can tell you in real time what pair to trade, and in which direction. It works for 28 pairs, including all 7 of the US Dollar pairs. After the NFP news the heatmap  indicated USD strength in real time. The arrow system pointed traders to the USD/CHF for a buy and the NZD/USD for a sell.

US Dollar USD News

The readings on the heatmap tell you how far these pairs moved. A 1.6% movement on the NZD/USD  is about 115 pips of movement, and a 1.12% movement on the USD/CHF is about 110 pips. The entire group of USD pairs moved hundreds of pips total.

From the standpoint of the trends of the market, the NZD/USD drop was in the direction of the long term downtrend on this pair. This pair should continue down to the 0.7225 support level and likely continue lower. So any sell trade on this pair would have resulted in an intraday profit, but also ongoing pip potential in the direction of the trend. Traders can use the heatmap to make informed buy or sell decisions on a day to day basis for trades in the direction of the trend, or possibly short term trades (day trades) against the trend. We have a great article that discusses trading non farm payroll NFP in more detail for further reading on this subject.

All US Dollar news events on the world economic news calendar are of great importance to traders. The same thing goes for news events from all of the currencies we trade. Making pips is possible from any of these economic news announcements with our trading tools and live indicators. If the US Dollar has a series of economic news showing that the economy is strong in the USA, and inflation is heating up, the US Dollar could start to strengthen against other currencies as the Federal Reserve starts to raise interest rates. Then, long term trends could form on pairs like the USD/CHF and USD/JPY. As trend followers we find this information to be vital.

Unscheduled US Dollar News

The economic news calendar shown above will give traders access to scheduled US Dollar news drivers, along with news drivers from all 8 currencies that we trade. Sometimes world political events, natural disasters, government of central bank actions, etc., can cause strong movement in the currency markets. We recommend using audible forex price alerts to supplement the scheduled news drivers for better monitoring of the 28 pairs we follow. Finding strong movements and breakouts gets easier with multiple alert systems.

Conclusions – Currency traders like the US Dollar and the major pairs for trading, knowing how strong the dollar is in real time, is extremely valuable to them. Live indicators like the heatmap are strongly favored by traders for increasing trading accuracy on the US Dollar pairs. If traders would analyze all 7 major US Dollar pairs daily,  they could easily determine if the US Dollar is strong or weak with simple trend indicators. This would lead traders to being able to perform a daily US Dollar forecast. We analyze the US Dollar daily at Forexearlywarning, along with 7 other currencies. We also prepare a forecast for the US Dollar every day.

Forex news trading is possible for any trader as long as you have the correct tools and indicators. We will show traders how to locate the most important forex news, then give them the proper tools and an indicator set for a complete forex news trading strategy.

Locating The Most Important Forex News

The exact times of scheduled news releases can be obtained from any forex news calendar. Here is a snapshot of a popular news calendar. Traders can see the news items with their exact release time, and the times can be adjusted to GMT time clock or local time. Forex  news calendars like the one below are part of your tool set for news trading for locating high impact forex trading news. High impact news items are in red on this particular news calendar. We also have a world economic news calendar on our website.

Forex News Trading

Indicators For Forex News Trading

A good set of trend indicators and a live signaling system are also part of a great forex news trading system. After the news there can be volatility in the market for the any of pairs with the news related currency, or possibly on other pairs too. Before doing any forex news trading, traders need to know the direction of the major trends of the market, and you also need to know if at least one currency is consistently strong or weak before entering any news related trades.

Knowing the direction of the major trends and having some simple forex trend indicators is a good place to start with your indicator set. Here is a set of free forex trend indicators that can be set up on most forex charting platforms. When you place a forex news trade you will know if you are trading in the direction of the major trends.

Another powerful tool for your news trading would be The Forex Heatmap®, which is a real time currency strength indicator for forex traders. This would be another great indicator to have ready for trading forex news. It works for 8 currencies.

Forex News Trading And Money Management

If you enter a trade after some important forex news, always place a stop order to minimize any risk of loss. When the trade proceeds in the direction of the indicators and the trend, then scale out lots and move your stop to break even. Scaling out lots means you take profits on half of your lots and let the remaining lots continue to profit, with a break even stop on the remaining lots. Capturing profits from forex news trading and moving stops will increase your account balance and reduce risk to zero.

Forex News Trading Example

Let’s look at one forex news trading example. The forex news calendar indicates an important Canadian Dollar (CAD) news driver at 1230 GMT in the main trading session. The news happens and the CAD is consistently weak on all 7 pairs in the group in one direction using The Forex Heatmap®.

Forex News Trading CAD Weakness

The heatmap specifies that the GBP/CAD has the best signal. You check your trend indicators and you see that the GBP/CAD is in an uptrend on the higher time frames, with no nearby resistance. In this case you have a very good situation for buying the GBP/CAD, or selling the CAD/JPY. With signals this strong a trader can enter a trade in the direction of the trend, and in many cases enter a short term term trade on the smaller time frames in the direction of the CAD weakness. Signals this strong and consistent generate great movement.

Forex News Trading CAD/JPY

Conclusions About Forex News Trading – Trading after forex news drivers is possible with the right set of tools, indicators, and forex money management techniques. The techniques and tools presented here work well for the 8 currency groups and 28 pairs we track daily as part of our trading system.

Today after nonfarm payrolls news the US Dollar USD strengthened on all pairs. The employment change was 248,000 jobs versus 216,000 forecast, which is good for the Us Dollar USD.  Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.This news drove price movement on all seven of the US Dollar USD pairs we track. Some pairs like the USD/JPY and the NZD/USD had strong movements today,  but these pairs are not trending and remain range bound.

Other pairs like the EUR/USD and GBP/USD broke through support levels on the USD strength and are continuing downward in there existing trends on the larger time frames, like the D1 time frame. These two pairs should continue trending down. The USD strength indicators you see below is The Forex Heatmap® forex heatmap, which provides real time trading signals during fores market hours, including after news drivers like non-farm payrolls NFP. World economic news events like nonfarm payrolls generate a lot of price movement and traders can use tools like the heatmap to see more exact trade entry points and generate trading pofits from the USD pairs or any of the 28 pairs we follow.

Non Farm Payrolls News USD Strength

Today after the non-farm payrolls news, the Canadian Dollar CAD strengthened on all pairs. The CAD/JPY continued upward in it’s current D1 time frame uptrend and has no resistance nearby, we would continue to hold this pair. The CAD/CHF broke through some resistance, the next resistance area on this pair is around 0.8500, we would scale out lots as it trends higher and approaches this next resistance point.

The AUD/CAD also had a very strong downward movement based on the CAD strength. The indicator you see below is The Forex Heatmap® forex heatmap, which provides forex traders with easy to read buy and sell signals in real time. The heatmap works well after any forex news driver like non-farm payrolls NFP, to help traders detect more accurate forex trade entry points. Non-farm payrolls can generate strong movement on many currencies, not just the US Dollar. It is not unusual for another currency group besides the US Dollar pairs to move after the non-farm payrolls news drivers.

Forex News Non Farm Payrolls