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News Event Trading: Price Action & Correlated Markets

Nowotny Comment 11 April 2018

Ewald Nowotny became the first ECB member to explicitly mention the size of a first rate hike from the ECB (20bps increase in depo rate). Not only was this more than the market expected but the first time a policy shift is communicated often creates the sharpest move.

An opportunity like this is one that all Axia traders will aim to take advantage of; crucial to making the most of the opportunity is a trader’s execution strategy and appreciation of the technical landscape. Knowing where levels are and the likelihood of them being breached or reached gives targets but also areas that if broken are likely to cause continuation – a break of current lows at 26/24 in the chart below is a good example of a point for continuation.

Employing the right execution strategy is the next step – rushing in to sell a hawkish comment often results in selling the low, therefore understanding how other traders will react and the way order flow shows this enables positions to be put on for continuation – either as entries if not in on the initial move or to add to trades already held.

Price action is the focus of this Axia Futures Mentored session as well as using a correlated market – in this case the Euro – to confirm a move but also allow a trade to be entered when Bund pulls back and Euro stays at its highs.



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