So I’m considering trading the BOE rate decision using a stop entry buy order for GBP/USD, prior to the release.
I’ve heard some traders use the term ‘Dovish Rate Hike’, I really don’t see this hike as dovish in the slightest but was wondering what everyone thinks will happen, price action wise to the GBP after the release?
any feedback would be appreciated,
edit:
Sorry, should have stated an ‘expected hike’ not “the hike”.
Anyway, theres a 90% probability they will hike rates today. In which case the markets have already discounted most of the event risk. However, because theres a 10% chance they don’t hike, the market could overreact to the downside because it would essentially be a huge surprise.
I’m kinda wondering from a technical perspective whether there are any GBP pairs that aren’t overextended that could potentially rally upwards on the release of a rate hike.
What hike ?
I’m not seeing any atm, but I know there is some speculation.
Trading news is always very risky, it can go in any one of four directions !
or not move at all !
Sorry, should have stated an ‘expected hike’ not “the hike”.
Anyway, theres a 90% probability they will hike rates today. In which case the markets have already discounted most of the event risk. However, because theres a 10% chance they don’t hike, the market could overreact to the downside because it would essentially be a huge surprise.
I’m kinda wondering from a technical perspective whether there are any GBP pairs that aren’t overextended that could potentially rally upwards on the release of a rate hike.
Sorry to butt in, but if you look on the BoE website at the voting record spreadsheet of the MPC you will find that at the last meeting there were seven out of nine members wanting no change to the interest rate: even Haldane, who previously was for several meetings a lonely voice in voting for a hike, has backed off the hawkish position. I do not see such momentum, but of course I could be wrong. Analysts and people on the street love to speculate, but you cannot trade a rumour without the due caution and unless you want to just catch a spike then you would be better off waiting for the market to digest the BoE news, also because you never know which way it will impact price.
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There are many speculations in the market before news release. It should be wise not to trade before the news if you dont have proper strategy. Anything can happen in the news. I usually close my trades and see the games during the news. After news considering news I open trades.
I have to agree. This feels a lot like someone telling me that they have a ‘sure thing’ on the horses.
My GBP positions were all closed out yesterday in anticipation of the BOE announcement. As a retail trader, I just don’t have access to the inside knowledge that makes ‘buy the rumor, sell the news’ profitable.
Remember, if you read it in the news paper, everyone else knows about it too.
With my real money trades, I was longer term and I used to be impervious to news, I never had a news event turn a trade round yet !
Now I’m paper trading and looking to intraday, I would be looking to fade the move if any that the news made. Often that works, someetimes it doesn’t, you have to be observant, nimble and quick to trade news.