At the last BoE meeting, sterling got some measure of relief as the bank decided not to move forward with rumored measures to cut the deposit rate for banks who held their reserves at the central bank.

Today, however, the Bank confirmed that it is considering making such a move and GBP took an enormous hit versus the broader market, swooning all the way back below 1.6500 vs. the USD and sending EUR/GBP to a new since June. 

The purpose of such a move is to jump start lending by the banks, who are hoarding capital as they try to repair their balance sheets and all manner of ugly assets they still contain. The very weak sterling yesterday came with very little to no news flow and one has to wonder if someone was in the know beforehand – very suspicious.

In any case, the pound has been very consistent inthe Forex market in reacting to every move from the BoE during this part of the cycle.

Let’s see if EUR/GBP pays any to the 200-day moving average up around 0.8885, just above today’s high thus far.. This sell-off in GBP/USD has been rather damaging to the up-trend – see more in today’s chart. Meanwhile, the RICS House Price Balance number was far better than expected and suggested that more estate agents are seeing rising rather than falling prices in the housing market.

The RBA statements at its last meeting at the beginning of this month were far less hawkish than expected, suggesting that an October hike the market was trying to price in was somewhat premature. The minutes released overnight confirm that the RBA’s trigger finger is less than itchy at the moment, as it sought to avoid “premature tightening”.

It is a bit surprising to see AUD not biting a bit more to the downside on this story and recent, less than inspiring data from the Australian economy. It looks like Aussie traders are following the moves in risk appetite in equities (scratched to new highs yesterday) and gold, which has recently topped the 1000-dollar an ounce mark.

The Fed’s Yellen was out with a rather dour speech about the economy and warned that deflation risk was greater than inflation risk. She recommended that the administration do more to support job growth. Meanwhile, Obama is going a bit out on a limb by declaring that the job losses are “bottoming out” .  Meanwhile, the treasury is considering unloading its share of Citibank for a significant profit (if it can get current market prices). Now if that isn’t a signal that the rally in equities has moved too far, we’d like to know what is?

The German ZEW was uninspiring, with the current conditions part of the index still rather gruesome, even if the expectations part of the survey notched a marginal new high for the cycle. This survey is symptomatic of the kind of hope that is out there for a strong recovery and suggest show much optimism is already priced in here. The expectations component has topped out around 70 three times in the last ten years, so we are already most of the way to the “top” after bottoming out at a remarkable -60 in October of 2008. It’s great if reality turns out to be so rosy, but scary to contemplate the disappointment if the future proves more humdrum.

The US data was far stronger than expected in the headlines and saw the paradoxical re3action of the USD heading weaker after the data (USD moving in inverse correlation with risk appetite, bla bla….), though not convincingly. This is getting a bit silly – if the US is really in recovery mode, then this should eventually be a positive for the dollar.

Looking at the internals of the retail sales data, it looks like much of the strength outside of Autos and Gas was due to back to school shopping (strength in clothing, general merchandise, book and sporting goods stores). The US PPI rose more than expected and bonds are selling off heavily, boosting USD/JPY to new highs on the day. The JPY will be very sensitive to any further sell-off in fixed income. 91.75/92.00 looks like a key area of resistance for that pair.

More Forex Trading Analysis: Moody’s came back yesterday to haunt the British Treasury.  Nearly six months after the rating agency lowered the rating on the sovereign nations debt, they came back yesterday with a warning that the country will be in negative territory for the next year to year and a half.  With all the whispering about the true state of the UK economy, publicly seen as stabilizing while privately seen as fledgling, the independent auditors at Moody’s has seemingly undermined political efforts to paint a brighter picture.

The result of this effort was a drop across the board in the Sterling, which has not performed as bad as it could have been after the parliamentary corruption scandal of the early summer.  In fact, British lawmakers have been scarcely seen on television or the newspapers for that matter, keeping a low profile to avoid any further scrutiny that could bring back the calls for a House of Commons overhaul.  To this end, even the Exchequer, Alistair Darling and Prime Minister Gordon Brown have been less than visible since the scandal – only talking when necessary and not really saying much when they do.

It should not come as a surprise that Moody’s found the British economy in bad shape and is forecasting a bleak immediate future.  With record unemployment, manufacturing and exports down to 50 year lows, cost of basic goods rising considerably and increasing poverty at the middle class level, it is a given that they are in trouble.  However, the opinion I hold on the fate of the Sterling in relationship to the current economic climate is bold, by any accounts, and contradictory to the Moody’s report.  Here is why:

I believe that the Sterling is one of the most fairly valued currencies in the Forex Trading Market out there at this moment because of Gold.  The UK spent hundreds of years pillaging and plundering the nations of the world for every natural resource it could find, especially Gold.  So the past 60 years has seen the Brits give back the land they occupied, the deals did not include the treasures.  The UK has by far one of the largest collections of Gold reserves, next to the Vatican of course, and the price of this precious metal has been on the rise topping $1000 per ounce last week.

Even if the economy spends another two years in depression, the value of the Sterling can be stable based on their reserves.  I am not a fan of the British economic policies and I do believe that the ease in which they have gone about spending citizen funds on bailouts has contributed to their situation, but I must respect the almighty Sterling – it has for a long time, and will for a long time to come, be worth every penny (or should I say quid?).

We have better and faster news sources than ever, yet most traders fail to use the news correctly and end up losing. Here we will show you the right way to use it and how to make huge profits.

Here we will examine why you can’t trade news by itself – but how you can use it to spot sentiment changes and great risk reward trades.

FACT: The News is unimportant by itself.

The news itself is not important in any financial market and that includes forex – it’s how the participants as a group react to them which is important.

While all traders have the same facts to look at, they all draw different conclusions and their conclusions combined; all added up equal the price.

Markets Discount

Many traders make the mistake of trading news stories and opinions they see; what they fail to think about is – the news is instantly discounted and the market is looking forward to the future and in addition, the news reflects the greed and fear of the majority who lose.

Judging Sentiment

You can’t follow news stories and trade them this is a recipe for disaster.

We know from history that markets collapse when they are most bullish and rally when they are most bullish.

Greed, Fear News and Profits

If you follow forex charts you can see the reality of price and you can also see price spikes, where the participants push prices to far away from fair value, due to greed and fear.

It is here the news is very useful.

You can see these spikes on a forex chart, they never last long and forex news can be very useful for taking a contrary trade and timing your trading signal.

Trading in a Contrary Fashion for Huge Gains

If you have news saying the market will never stop rising or falling chances, are you have climax of greed and fear. The herd will simply push prices to far from fair value.

You saw this in the recent dollar bottom as the bearish argument became totally discounted. If you believed the news, there were no problems in other countries (there were and are) oil was going to go to $200 a barrel (despite global demand falling) and the US economy would not see rate rises soon (despite the fact they indicated they would). If you sat back and looked at these facts, you would see that dollar selling was overdone – what happened next?

The dollar made a huge rally.

If you used your forex charts you would have seen the spike climax, then a collapse and made several thousand pips profit.

Will Rodgers once said.
“I only believe what I read in the paper”

He was joking but traders often take what the papers say as gospel and lose.

If it were easy to follow the news and trade in the direction it recommended, far more traders would win.

The way to use news is to judge sentiment and look closely at its impact if you can do that forex news can give you some fantastic trading opportunities and profits.

I’m going to talk to you almost forex trading news. This market is a very rewarding market to those that know how they’re working at and can stay in the future of the pack. If you can’t do that, you can lose a lot of your money. There are some amazing free sources of data that you can use to profit in this 3 trillion dollar a day marketplace. I’m going to share with you how to properly use it and understand it.

You can watch regular shocker to get now information. If you get a financial revelation channel desire CNBC, as opposed to you will get obviously additional news connected to it. None of this news might be filtered or focused for the forex trader, which makes it harder to understand, but less of a mainstream source for the traders out there.

A money is essentially paper and that is worthless in itself. The value comes from how perfectly an market’s success is going, stability of it and the political soundness in this market. Basically that means, if the region is performing well, is rather stable and the politicians aren’t messing details up, a currency will be good.

You look for to pay attention to the boom news which is typically made up of GDP growth, unemployment rates, consumer spending, inflation, etc. You want to know what these say and what is pending of them. If the to hear is good, you can expect a rally in the currency. If they’re bad, you can presume a dive. By following this, you get free forex trading news which is very valuable.

If you want to keep ahead of the game when it comes to doing forex, one of the best ways you can do that is through the help of forex trading news. These days, there are plenty of references where you can get your daily dose of forex information. You only need to make sure that you get the ones that are accurate enough and timely so you can properly position yourself through the information you get. Forex news comes out fresh on a daily basis. Sometimes, it even gets updated every hour since international news almost never sleeps.

The Benefits of Forex Trading News

On the minimum, forex news keeps you updated. It gives you a lot of crucial information that are true, accurate, and interesting. Most forex reporters and media have close tie ups with the necessary forex agencies which may also feed them new information and scoop as soon as it happens. However, the critical thing to consider when it comes to getting forex news is where you would get your information. Make sure that you only get your dose from the big names in the media industry. This gives you the assurance that the topics are not fabricated.

Aside from these, forex news also provides you with a healthy mix of government and private news. You need to remember that different types of people are involved in forex. There are the government affiliated agencies and also big financial private companies who both play key roles in maintaining the liquidity and efficiency of the foreign exchange market. Most of the forex news, especially if they are about critical industry issues, offer both sides of the story—meaning expert analysis, comments, and other relevant in-demand facts related to the story at hand.

Verifying Your Forex Trading News

There are some important tips you need to follow to make sure that you only get the best and the most accurate forex news you could possibly get your hands on. One way you can do so is by checking for primary references indicated right before the news itself is presented. If it’s from media authorities such as the AP, AFP, or Reuters, then you can be sure that these are authentic pieces of news information. Regardless of which website you see these news, so long as you see such media names written on the article it means that the source of it is credible enough. These media companies place ownership on their articles no matter where it may be published.

Another way to verify the authenticity of the news you get is by checking the numbers. If the news articles talk at length of what seemed to be opinions only, you would be better off checking other news on other websites. News that contain numbers also cite their references. After all, they are news articles and not research pieces. So when you see numbers in the news articles that you read, you are given the chance to verify the sources and even lead you to study more on the current issue.

Today, forex trading news is more plentiful than ever. There are numerous sources to choose from and there all delivered at the click of a mouse, so you can get breaking news whenever you wish.

Here we will look at how to use Forex trading news and mistakes to avoid.

First let’s start with a rather startling fact:

100 years ago 90% of traders lost and today the ratio still remains the same.

This is despite better more frequent Forex news, better computers, more powerful software and more information than ever on the markets.

The fact is knowing the news won’t help you win – in fact, it generally helps traders lose! There are 3 main reasons for this:

News is discounted in a split second.

In today’s world of instant communications news is discounted immediately, so by the time you have seen it and had a chance to act upon it, the moment has gone and the market is looking toward the future.

News is Stories

Those analysts are so convincing with their arguments! Their normally great at explaining what has happened – but you can’t trade off what they say, as they have no idea what will happen – there simply stories and opinions.

Will Rodgers once said.

“I only believe what I Read in the papers”

Now he was joking, but its surprising how many traders take what they hear on the news as a recommendation to trade.

News Gets Your Emotions Involved

Humans don’t like to stand alone and the news reflects what the majority want to hear but that is completely different from what you have to do, to trade to win.

The bulk of traders lose and the bulk listen to the news, so if you avoid it, you can step aside and not let your emotions get involved.

If you do this, you can trade in a disciplined fashion and join the elite minority of winners.

If you use forex charts and simply follow price action, you are far more likely to be successful than you would be by following news stories.

WHERE THE NEWS CAN HELP YOU!

There is one great way to use the news:

If you see a very bullish or bearish market and the news supports the prevailing view but the market does not react the way it should – then its time to look for a contrary trade and time your entry points via your forex charts.

It’s a fact that:

Bullish markets collapse when the fundamentals are most bullish and bearish markets rally when the news is at its most bearish.

If you can look for these turning points on your charts and find the news suddenly stops pushing the market the way it should, a contrary trade is developing and a big profitable trade is shaping up.

Finally

The way to use forex news outlined above, is a very powerful profit tool but completely different to the way most forex traders use it!

I wanted to talk to you about a few forex trading news tips that I’ve picked up in my time that have helped me stay ahead of the market and profit. This market is very large with trillions of dollars each day being traded. There is a lot to learn and there is even more information to keep informed on. News is a really great resource, even though it isn’t even filtered for the average forex trader. You’ve probably never seen any forex information on the news, but it wasn’t until I looked at things a little deeper, that I figured it out. The economic news will end up effecting the market, so obviously staying up on the economic news will keep you informed. I’m going to show you exactly what you need to know.

All the currency in the world happens to be fiat. That means paper money is backed by nothing. Currency used to be backed up by some sort of precious metal like gold, but that isn’t so now. The currency in an economy has to follow supply and demand like any other product or service. When gold was the standard, you’d produce more goal to meet demand, but in a fiat system, the central bank is forced to guess what the demand is and they’re often wrong. Since they’re wrong most of the time, they end up causing variations in the price that traders can exploit.

It is the economic news that comes out that is going to help you. The good thing about this type of news is that it is never breaking. All the reports are released at scheduled times. Watch for unemployment rates and GDP growth. If it shows good news, than it is good for the currency. If it is bad news, than it is bad for currency.

You can use trading news as an important tool to gain profit in the Forex market. Forex trading news, mostly economic news, tells you about the current economic condition of a country as well as the economic policies that shape their condition. Learning how to use the Forex trade news is vital to earn your profits from the trade.

Here is how to use Forex news to gain profit:

• Identify the market sentiment. Find out how the news supports the existing sentiment, which can either be very bearish or very bullish. If the Forex market does not respond the way it is expected to, you can start your search for a divergent trade and use your charts to time your entry.

• Consider the reality that when Forex trade news is at its most bearish, very bearish markets rally and when the news is at its most bullish, very bullish markets collapse. You can do two things with this in mind: (1) use your Forex charts to search for turning points; and (2) find out if the news does not press on the market the way it is supposed to. When you are able to do so, you can spot divergence trading with huge profits in the offing.

Naturally, there are risks involved when you use the news in your Forex trades. That is why solely “trading the news” is something that you should be doing at your own risk. But if you can use the news just as mentioned above, then you’re in for a successful trading profit.

In Forex trading, news is as vital as the actual trade. One needs to constantly be updated for them to be able to trade efficiently and wisely. There are a number of details one needs to look out for on their daily course in the foreign exchange trading. These are needed for one to be able to make their choices and decisions in their lots.

There are a number of items one can find in daily Forex trading news; among them are the PIPs or the Price Interest Points which will determine the movement of the currency trade by the representation of the lowest fluctuation of the trade. This will help an investor or a broker to make critical decisions the same way charts are vital. Another factor which will be present in the daily news or bulletins in the Forex market is the current exchange rate. The current rate of each currency being traded or traded for will also be vital in determining the movement and the value of the lot.

Among other things one will find in Forex trading news are the charts which are also the tools essential in the foreign currency exchange. There are other things one will find essential for them to know the current profit or loss, whichever is applicable as well as the trends and possible predictions for future developments. Keeping up to date with what is happening will be the smartest move a broker or an investor will make; otherwise, they may fall prey to blind sights of decisions made by a simple hunch without proper information to support its feasibility.