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® 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 planning 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 Rate Cuts, GBP/JPY Selloff
The Forex Heatmap® Showing GBP Weakness After The Bank Of England Interest Rate Cuts, Forex News
In this video we will use one group of currency pairs to show traders how to build a sample forex trading plan for any pair in that group. These principles for building a trading plan work for any group of pairs with one common currency. Our example will be for the Japanese Yen (JPY) pairs. To prepare a trading plan for the JPY pairs you would drill down the charts using multiple time frame analysis. The AUD/JPY NZD/JPY, CAD/JPY, EUR/JPY, etc., all 7 JPY pairs total. In this example the long term trends on the higher time frames are all pointing down, and the H4 and D1 time frames are reversing back down into the trend, so the charts show that JPY is strong and that the JPY pairs are dropping. Our trading plans for this day reflect the JPY strength.
We prepared written trading plans for various JPY pairs along with the price alert points for traders to set audible alerts to detect the movement to the downside. When the price alerts start to hit in the Asian session the JPY pairs are in an obvious sell off and our currency alert system also shows the sell off. This is a very safe way to trade the forex and this method works for all 8 groups of currency pairs we trade, i.e., USD pairs, CHF pairs, NZD pairs, etc., for a total of 28 pairs. Use the techniques in this video to prepare a sample forex trading plan for any group of pairs until you get more practice.
Today in the main forex trading session the CHF was weak on all pairs. The CHF/JPY dropped substantially and is trending lower on the D1 time frame, it has ongoing pip potential in the current downtrend. The NZD/CHF also moved higher and this pair should start trending up on the H4/D1 time frames. We will look to plan more buys going forward in our trading plans on the NZD/CHF. Other CHF pairs like the AUD/CHF and GBP/CHF moved up pretty strong today on the CHF weakness in the market but these pairs are inside of ranges and were short term buy trades or day trades. The images below show the live CHF trading signals from The Forex Heatmap® along with the associated price chart movement in the direction of the trends.
The EUR/AUD is forming a new uptrend on the D1 time frame. Traders can set a buy alarm at the 1.4775 level. The upside potential on this new trend is as high as the 1.5500 resistance level, so entering this trend has excellent upside potential. When the price alert hits check The Forex Heatmap® for trade entry verification signals. The trend charts you see for the EUR/AUD are exponential moving averages which are easy to set up. These trend indicators can be used to follow the major trends of the forex market and our trend based trading plans.
Today in forex trading the GBP (British Pound) was weak on all pairs in the group and this drove very strong price movement. The live trading signals for the GBP and JPY (Japanese Yen) pairs are shown below from The Forex Heatmap®. The GBP/USD and GBP/JPY had very strong sell offs and broke through short term support levels and into their long term trends. The NZD/JPY also sold off on the overall JPY strength in the market today. The GBP/JPY and GBP/USD are in strong downtrends and both pairs are at post-Brexit lows, and the GBP/USD is at a multi year low. We see a lot more sell potential ahead on these pairs. The Forex Heatmap® provides live buy and sell signals for 28 pairs. You can see the signals from the JPY and GBP pairs in the images below along with the nearly 400 pip sell off in the GBP/JPY.
The NZD/CHF is trending higher on the W1 time frame. Traders can set a buy alert at the 0.6985 resistance area, which is noted on the chart. When the price alert hits price check The Forex Heatmap® for a confirmation buy signal. The NZD/CHF has great upside pip potential past the alert price up to the 0.7400 area resistance level, noted on the trend chart below. So the overall pip potential is about 400 pips, which means the risk to reward ratio and money management ratio for this trade is excellent. We conduct all of our trend analysis using multiple time frames of trends. We isolate each currency like the NZD and CHF plus six other currencies and analyze them separately to determine the trend and overall plan of entry.
This video will show traders how to set up metatrader profiles for easy analysis of individual currencies. This will enable traders to group pairs by individual currency, following the principles of parallel inverse analysis. Setting up a metatrader profile for individual currencies mimics The Forex Heatmap® and our market analysis spreadsheet. You can set up each currency group of 7 pairs in one MT4 profile, set up one profile for the USD pairs, one profile for the JPY pairs, one profile for the AUD pairs, etc. Then you can access each metatrader profiles template quickly with one mouse click for analyzing an individual currency across 7 pairs. Setting your trend indicators up this way allows you to see the market movements if a particular currency is consistently strong or weak. If the Euro is strong, for example, you can see at a glance if all of the EUR pairs are moving higher. Following the logic of the market is easier with this setup. This is the best MT4 chart template available to forex traders, because you will always know why a group of pairs is moving up or down.
This video will show forex traders how to set audible forex price alerts on the metatrader charting platform. This will allow traders to monitor any currency pair for price breakouts or trend continuations after consolidation phases. First, a trader should locate a trend on the larger time frames for a trend continuations or breakout point. Then you locate the breakout point on the short term support or resistance levels on the smaller time frames, like the M5 and M15 time frame.
Next, traders can set an audible forex price alert at the short term levels to intercept the next price movement. Then the video will illustrate the mechanics of setting the price alerts for any pair. When the price in the alert is hit, the audible alert will notify you of the price breach on your desktop, and it can also be delivered by email to your email box or mobile device. Then you can check The Forex Heatmap® to verify the trade entry. This is one of our alert systems, we have several forex alert systems so you always know when the forex market is moving.
In this video we will show traders how to set up our trend indicators for individual currencies. For example you can set up the USD pairs all together on your screen so you can see all of the USD pairs together. This will allow you to see what individual currencies are strong or weak and consistent based on the trends of the market. This chart setup can be duplicated across any of the 8 currencies we trade. This setup works for the USD pairs, but it can be set up to view all of the JPY pairs on one screen, or all of the AUD pairs on one screen, etc. Once you set up a chart with these simple trend indicators you can arrange them by individual currencies by grouping them with your mouse. By setting up your trend charts this way, traders can group pairs together by individual currencies to match the eight currency groups on The Forex Heatmap®.
Here is an example: If the EUR is consistently strengthening in real time on the The Forex Heatmap®, then all of the EUR pairs will be grouped together in your charts also, for consistency. Conversely if you are analyzing the EUR pairs on the charts they will all be grouped together, just like the heatmap, once again for consistent analysis of one currency. This way your charts are set up to where the chart analytical method matches your trade entry system and is consistent. You can use these individual currency concepts to prepare trading plans based on individual currencies all trending in the same direction across multiple pairs, and it works for all 8 currencies we follow.
Today in forex trading the CAD (Canadian Dollar) was weak, the NZD/CAD and AUD/CAD moved strongly higher. The NZD/CAD is trending on the W1 time frame in place, and has additional upside potential. The AUD/CAD had a strong overnight movement and has broken one resistance level on the D1 time frame. Both of these pairs have ongoing upside potential and we will look to continue to write additional trading plans for buys over the next few days. The AUD/CAD has hit a high of 0.9575 in intra day trading, and the NZD/CAD has hit 0.9090. The NZD/CAD has potential up to the 0.9400 area on the W1 time frame trend. The live trading signals you see below are from The Forex Heatmap®, which provides live buy and sell signals for 28 currency pairs. The heatmap give traders guided trade entry points for trending pairs and day trades.