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Events Trading: Trading Economic Data with a Technical Bias

GBP/USD 18 July 2018

Why does one piece of economic data have a larger impact than another? The obvious answer is that the market deems it more important, however the importance of data often comes down to where the market is; for this reason the result of the data release can have a greater or lesser effect depending on whether it marries with current sentiment in the market.

Going into UK CPI, GBP/USD had shifted down and reached key technical support – for this reason a weaker than expected CPI print would likely cause a larger reaction than a stronger print as it would break the level causing stops to go off and a move into a new area for GBP/USD. From a fundamental perspective, weak CPI could also cause the expected rate hike in August to be priced out of the market whereas a strong number would only serve to further confirm what the market expects.

Knowing the technical and fundamental landscape before economic data allows a trader to plan their trades in terms of where to be most aggressive and also which result the data will produce the most advantageous move. In this live AXIA daily debrief Richard talks through the significance of the technical landscape as well as how a trade can be planned and executed based on the data that came.

 

 

Event and economic data trading are key skills developed by all AXIA traders and as such a whole week is dedicated to trading around these large opportunity events on the Axia Futures 8-week Trader Training Career Programme.

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