RBNZ (Reserve Bank of New Zealand) will be rendering its Interest Rate Decision on the current rate of 2.50%. Analysts consensus is for an unchanged verdict at 2.50% as the current market condition and New Zealand’s economic outlook don’t justify further rate cutting or hiking at this present moment. However, it is possible we might see some speculative market movement prior to this release, as the accompanied statement may disclose future monetary policy direction and surprise the market.
My plan for this news release is simple: 1) If RBNZ surprises the market by either cutting (more likely) or hiking (more unlikely) current rates, I will trade in the direction of the surprise, i.e. BUY NZD/USD at HIKE or SELL NZD/USD at CUT; 2) If RBNZ decides to leave rates unchanged, it would be automatic no trade, but I’ll then move to decipher the accompanied statement. If the statement is bullish or dovish, I’ll evaluate market reaction at the time and possibly get into a trade. At any rate, if the rate decision is unchanged and the statement is lukewarm, I’ll stay out of the market and live to fight another day.
I’ll be posting my live videos below.
UPDATE: RBNZ decided to leave rates unchanged but the accompanied statement mentioned a possibility for rates to move further lower. Combine that sentiment with a fresh renewed sell-off of NZD on a BUY on Rumor SELL on Fact type of market reaction, we saw some 70 pips of immediate drop on the NZD/USD pair. I waited for the drop and for the retracement, then I went in on a SELL NZD/USD trade that eventually netted me 20+ pips on Video, but I was able to pick up 30+ in my real account, while not missing a night out of delicious chinese dinner with my family…
[flv:http://www.newsprofiteer.com/072909-rbnzrate/072909-rbnzrate.mp4 480 360]
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{ 10 comments… read them below or add one }
Great video Henry, thank you for sharing your knowledge with eveyone it is really appreciated. I feel that I am learning something with every example you record. This is what I needed, someone that shows you what to look for, Thank You. Also looking foward to your DVD.
Hi henrry really apreciate your help and time is priceless please can you tell me how you identified a reversal is going to occur in the marquet cicle and what time frame you use thanks.
Market will always reverse, except during an extreme rare situation that instead of reversal, you’ll see that the market just stalls. Most of the time I am looking for a bounce from a bottom, and then I wait for that bounce to settle at a level, then I draw my Fib’s to determine if it is a good retracement for an entry.
Great trade for the Kiwi which has such a wide spread and low liquidity. Your night out Chinese dinner must have tasted good knowing that you have already profited from the trade despite the fact that your position is still running.
One question – what is the news service that was broadcasting in the background which gave the RBNZ Rate Statement?
I use Tradethenews.com news wire service. The cheapest of them all with excellent quality.
Hey Henry,
I really enjoy all your teaching, and I’ve already bought your book – which was fantastic, a really great read.
Thanks so much for taking the time of explaining these things to us, you don’t have to do it, but still you make the effort to share what you’ve learned.
There is nothing else that beats a real scenario, and watching you do the trades live is one of the best ways for me to learn.
Thanks Henry,
Steen Nielsen
Dear Henry,
How can I sign up for RSS Feed?
Thank you,
Imran.
Kiwi is a monster as NFP does, congrats for trappers
Given that the numbers did not change, I did not consider a trade but only watched the reaction because I don’t normally trade the kiwi. It was surprising to see a 70 pip move over two minutes.
Looks as if they had anticipated and priced in a change in the rate that did not come. And are now falling in line with the major pairs in relation to the US dollar.
Interesting…
Hi Henry,
Thank you for your useful information and teaching. Can you show us your news trade in REAL TIME that we can see when you trade?
How can we sign for your RSS Feed?
Best Regards,
am