GBP is still showing a forecast of an interest rate hike next week and with GBPJPY testing 144.00 it is a prime time to enter the market.

Economic Indicators are light up to the meeting so no barriers there.

Central Bank Statement Highlights

In the MPC’s most recent economic projections, set out in the August Inflation Report, GDP was expected to grow by around 1¾% per year on average over the forecast period, conditioned on the gently rising path of Bank Rate implied by market yields at that time.
The contribution of external cost pressures, which has accounted for above-target inflation since the beginning of 2017, was projected to ease over the forecast period. Taking these influences together, and conditioned on the gently rising path of Bank Rate, CPI inflation remained slightly above 2% through most of the forecast period, reaching the target in the third year.

The MPC want inflation at 2% so all releases regarding inflation are to be watched.
GDP is another to watch and in particular if any deviation from the 1% growth expectations.

Central Bank Statement

The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

The ECB are solely focused on inflation and going to keep interest levels low until they recover.

 

Highlights of Central Bank Statement

In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

The FOMC are clearly focused on inflation being returned to 2% therefore the Inflation indicators become significant and even more so when the consensus reflects indifferent or worsening conditions.

The labor market is also a focus and can be traded into when the consensus is indifferent or worsening.

 

In just over a week, the Bank of England MPC are due to meet for a vote on setting interest rates. Forex Factory is currently forecasting a hold at 0.75% however, Trading Economics are predicting a rise to 1%. I am preparing to purchase GBP.

Economic Indicators are light up to the meeting so no barriers there.

Live Charts are showing the strength on GBP to be strong thus not a great time to enter right now.

Geo politically, Brexit is a huge dilemma and given traders indecision.

A perfect entry is the GBPJPY day support at 142.20

A good entry is the GBPJPY 4 hour low at 145.20

Review and Preparation [REVPREP]

  1.  Fundamental Data
    • Update Indicators that have new data released
    • Make a note of Indicators and its currency that have data out shortly
  2. Sentiment Data
    • Working through the currencies that have had new data out today
      • update the Previous, Next and Horizon.
  3. Summary
    • Review the Summary data and note the currency pairs that are determined suitable for trading, Tradeable Pairs [TRAPS].
  4. Technical Analysis
    • Abort/cancel the trades on MT5 and close the charts for Untradeable Pairs [UNPA]
    • Go through Technical Analysis Process for the TRAP’s
  5. Orders
    • Enter orders into MT5
  6. Record activities in Trading Journal.

Session Preparation [SESPREP]

  • Identify currencies that have a data release in the coming Session(s), Currencies of Interest [COI]
  • Determine if there is a TRAP and what its Risk Profile would be if the data is:
    • better than expected
    • as expected
    • worse than expected
  • Prepare the charts of any potential TRAP’s

Currency Evaluation [CUEV]

  • Using an Economic Calendar, calculate using predetermined metrics what direction the sentiment has swung. Record the direction.
  • If the data is an indicator used to measure the Fundamental Direction then also record it as such.
  • The recorded result could determine a TRAP.
  • Use previously prepared chart to identify suitable placement of entry.
  • Place order on MT5.