BOE Rate Decision, US & Kiwi Inflation Reports, MTF Analysis, CADJPY Surging +200 Pips

Rise and shine, savvy investors! Start your day off right with the latest edition of Currencies & Coffee - the newsletter that delivers actionable insights and expert analysis.

Here's what we’ve got covered:

☕BOE’s rate decision and inflation reports

☕MTF analysis  for Informed trading decisions

☕EURCHF Teaser, CADJPY +200 Pips

🗞️Movers & Shakers🗞️

The US Dollar's Midweek Dance: Eyes will be on the dollar this Wednesday, May 10 (12:30 pm GMT), as Uncle Sam rolls out the red carpet for the April headline and core CPI readings. After a slight cool-off in March, inflation might be ready to heat things up again. The headline reading is expected to sizzle with a 0.4% increase, leaving the year-over-year CPI lounging at 5.0%. The core CPI could come in a tad cooler, with a 0.3% gain.

Also, Watch out for the U.S. PPI reports on May 11 (12:30 pm GMT) too. If the numbers beat expectations, they might echo the Fed's hawkish tune from their May statement bolstering dollar strength.

BOE's Interest Rate Intrigue: On May 11 (11:00 am GMT), the spotlight swings to the British pound as the  Bank Of England (BOE) is set to deliver its interest rate statement. Most folks are betting on another 0.25% hike in borrowing costs, pushing the benchmark rate from 4.25% to 4.50%. This move aims to tame the stubborn inflation beast. But if the BOE hints at a possible intermission in their rate-hiking show, the pound could lose some of its swagger and see some downside. Also, tune in to BOE Chief Bailey's speech at 11:30 am GMT!

Kiwi's Inflation Expectations: We conclude in New Zealand with the release of the quarterly inflation expectations on May 12 (3:00 am GMT). Last quarter, expectations dipped from 3.62% to 3.30%, which had the Kiwi’s a bit on edge about the Reserve Bank of New Zealand's (RBNZ's) tightening prospects. If inflation expectations rise this quarter, the RBNZ could continue its tightening spree, potentially boosting the New Zealand dollar.

Economic Calendar

Mastering Multi-Timeframe Analysis for Informed Trading Decisions

Many traders often stick to analyzing the market on a singular time frame, making their trading decisions based solely on that time frame. However, this approach can sometimes catch traders off guard by larger market movements that aren't apparent in their chosen timeframe. By failing to contextualize the price action within the larger market structure, traders may miss critical signals for potential trend reversals or continuations. Here are a few tips for incorporating multi-timeframe analysis into your trading to gain a more comprehensive market view and significantly improve your trading decisions.

Understand Multi-Timeframe Analysis

Multi-timeframe analysis involves looking at the same asset on multiple timeframes to gain a more comprehensive understanding of its trend. For example, if you're trading on the 1-hour chart, you might also want to examine the daily and 4-hour charts.

Determine the Higher Timeframe Trend

First, determine the trend on a higher timeframe. This provides a broader view of the market and helps you identify the overall trend direction. Remember, the higher timeframe trend is a powerful force influencing lower timeframe price movements.

Identify Key Support and Resistance Levels

Next, identify key support and resistance levels on the higher timeframe. These levels can provide strong barriers where price movements can pause or reverse, and they can often hold true even in lower timeframes.

Fine-Tune Entries and Exits on the Lower Timeframe

Once you've determined the higher timeframe trend and key support and resistance levels, fine-tune your entries and exits on your trading timeframe. Look for price action signals that align with the higher timeframe analysis. This can provide high-probability trade setups as you're trading in harmony with the overall market momentum.

Beware of Timeframe Discrepancies

Keep in mind that signals on different timeframes can sometimes contradict each other. In such cases, deferring to the higher timeframe is often safer, as it's likely to be more dominant.

Action Steps:

✅Identify the trend, key support, and resistance levels on a higher timeframe.

✅Look for trade entries and exits on your trading timeframe that aligns with the higher timeframe analysis.

✅Be mindful of conflicting signals on different timeframes and defer to the higher timeframe when in doubt.

By leveraging multi-timeframe analysis, you can make more informed trading decisions, increase your chances of success, and continue to improve as a price action trader.

Sip, Laugh, Trade 😁

📈Latte Line Up 📈

-EURCHF- (from last week 👉HERE)

Unfortunately, luck wasn't on our side with the EURCHF setup from last week. As mentioned in our Nexus Hub, I entered the trade, but things didn't go as anticipated. I decided to close the position for a small loss just before the stop loss level, as the market reached my break-even point and abruptly reversed its course.

In hindsight, we can see that the price eventually dropped to the target we had initially identified. However, in the trading world, we sometimes encounter unpredictable market moves beyond our control. These random fluctuations can impact even the best-planned trades.

The key takeaway from this experience is the importance of implementing risk management techniques. It's crucial to cut our losses promptly when necessary while allowing our winning trades to run their course. By doing so, we protect our capital and maintain a balanced approach to trading.

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-CADJPY- (+200 pips from last week 👉HERE)

As we shared with our esteemed Mastermind Newsletter members, we patiently awaited our higher time frame (HTF) confirmations before shifting our focus to the lower time frame (LTF) to identify a suitable entry opportunity. The diligent analysis paid off as the setup unfolded as expected.

The initial confirmation came as a daily rejection candle, signalling a potential shift in market sentiment. This was followed by a noteworthy follow-through of momentum on the 30-minute chart, where we witnessed a clear break and subsequent retest of the market structure.

Seizing the moment, we executed a long position upon observing a bullish engulfing candlestick pattern. We placed our stop loss below the previous 30-minute low to manage risk effectively, safeguarding against adverse price movements.

With our sights set on the HTF high around 101.80 as a target for this trade. It's worth noting that our trade is currently running with a remarkable gain of over +200 pips.

Now for this week's setups.