Brace For Inflation Updates, High Volume Sessions & +500 Pips On a Platter

Here’s what we have covered today:

☕Currency Markets Brace for Key Inflation Updates

☕Mastering High Volume Sessions

☕+500 Pips on a Platter

🗞️Movers & Shakers🗞️

Canada’s CPI report: Get ready for the latest inflation figures from Canada! On June 27 at 12:30 pm GMT, the market will eagerly await the release of Canada's CPI report for May. After a surprise increase in April, with headline consumer prices rising by 0.7%, expectations are for another 0.5% increase in May. If the numbers meet or exceed expectations, it could put upward pressure on inflation, potentially pushing the annual rate lower from 4.4% to 3.6%. However, even if the CPI readings come in lower, there are speculations that the Bank of Canada (BOC) might proceed with another 25bps rate hike in July, indicating the central bank's commitment to addressing inflationary pressures.

Central bankers’ panel discussion: Mark your calendars for June 29 at 1:30 pm GMT, as the European Central Bank (ECB) hosts a panel discussion featuring central bank heavyweights such as Fed's Powell, BOJ's Ueda, and BOE's Bailey, along with ECB President Lagarde. This highly anticipated event will provide insights into the policy direction of major central banks. Pay close attention to any themes or hints dropped during the discussion, as they could influence market expectations and impact currency movements.

U.S. core PCE price index: All eyes will be on the U.S. core Personal Consumption Expenditures (PCE) price index on Friday at 12:30 pm GMT. The market expects to see a slight easing in prices for May, with the monthly core PCE projected to dip from 0.4% to 0.3%. This could contribute to a decrease in the annual rate from 4.7% to 4.3%. While the core PCE is an important inflation gauge for the Federal Reserve, any insights from this report could be overshadowed by headlines from Fed Chair Powell and other central bank officials, adding an extra layer of anticipation and potential impact on the currency.

Preliminary CPI from the Eurozone: In addition to the ECB's central bank forum, we have another headline-grabbing event from the Eurozone. Keep an eye on preliminary CPI estimates from key economies like Germany, France, and Spain. Germany is expected to show a monthly increase of 0.2% (compared to -0.1% in April), while France is also projected to see a 0.2% increase (versus -0.1% in April). Spain's year-over-year figures are anticipated to slow from 3.2% in April to 1.7% in May. The Eurozone's headline prices are expected to ease from 6.1% to 5.6% year-over-year, but core prices could still accelerate from 5.3% to 5.5% year-over-year. If the CPI readings exceed expectations, it could fuel hawkish expectations from the ECB and potentially impact the Euro's performance in the currency market.

Economic Calendar

Unlocking the Power of Europe, London, and NY Trading

Today, we're diving deep into the world of high-volume sessions, focusing on the Europe, London, and New York (NY) sessions. As an experienced trader with over a 5-yrs of experience, I understand the importance of trading during these high-volume sessions for optimal trading outcomes. So, grab your cup of joe, and let's explore the advantages of trading during these influential market periods.

Understanding the Sessions

The Asian session, spanning from 12:00 AM to 9:00 AM GMT, is characterized by lower trading volumes. It primarily involves market activity from countries like Japan, China, Australia, and New Zealand. While the Asian session may present some trading opportunities, the lower volumes often result in erratic price movements and unreliable confirmations.

The Europe session, commencing at approximately 7:00 AM GMT, marks the start of the trading day in major financial centres such as Frankfurt, Paris, and Zurich. During this session, currency pairs involving the euro (EUR) witness increased volatility and liquidity, presenting ample trading opportunities. Traders should keep a close eye on economic news releases from European countries, as they can significantly impact price movements during this session.

The London session begins at around 8:00 AM GMT and is widely recognized for its influential role in shaping market trends. With London being a prominent global financial hub, this session witnesses heightened trading volume and liquidity, particularly in currency pairs involving the British pound (GBP). Major economic news releases from the UK and Europe during this session often lead to significant market movements, creating exciting trading prospects.

The New York session, starting at approximately 12:00 PM GMT, overlaps with the end of the European trading day. As the largest financial centre in the world, New York generates substantial trading volume and liquidity, making it a vibrant session for traders. Major currency pairs involving the US dollar (USD) witness significant activity, with economic news releases and events from the United States driving market movements.

The Significance of High-Volume Sessions

High-volume trading sessions, such as the Europe, London, and NY sessions, offer increased liquidity, market depth, and trading opportunities. These sessions involve major global financial centres and attract substantial participation from institutional traders, banks, and retail traders. The higher volumes provide more reliable confirmations and stronger price movements, enhancing trading precision.

Escaping the Asian Session Trap

In the early days of my trading journey, based in Sydney, Australia, I found myself consistently trading during the Asian session. Since the Euro, London, and NY sessions started later in my day, I believed it was the logical choice. However, I soon realized that low trading volumes during the Asian session resulted in unreliable confirmations and traps in the market. Determined to improve my trading outcomes, I implemented a rule to focus only on high-volume Europe, London, and NY sessions. This pivotal change transformed my trading results, as confirmations carried greater meaning, leading to more consistent profitability.

SIP, LAUGH, TRADE 😁

Just a little misunderstanding...

📈LATTE LINEUP📈

-AUDCAD- (Full target, from last week)

I shared this setup with everyone last week HERE. The setup played out exactly as planned following our higher time frame confirmations. We had the shift in market structure on the lower time frame and the perfect entry.

This was over 200 pips with over 1:10 risk to reward.

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-GBPAUD- (+350 pips from last week)

This setup was shared with our Mastermind subscribers last week. On the higher time frame of the daily, price action strongly suggested a potential fakeout scenario. Initially, the price formed a new higher high, only to subsequently retrace all the way back to the 100% Fibonacci retracement level. Notably, the price attempted to break this level but failed, indicating a potential reversal in the making. Despite the failed breakout, we observed buying pressure emanating from this level.

Moving to the lower time frame of the 1-HR, I wanted to see a clear break of the rejections to the left I’ve marked in the red arrow. Then I wanted to see the pullback and bullish engulfing or rejections to go long. Stops were to be placed below the lows and targets of the daily high.

Everything went to plan with the price blasting of +350 pips.

-AUDCHF-

HTF(Daily): The price action unfolds in a textbook manner, with a clear formation of a higher high. The subsequent pullback brings the price back to retest the previous resistance level, which now acts as support. Additionally, we observe a significant push into the golden pocket on the Fibonacci retracement, adding further weight to the potential trade opportunity.

As we await the entry trigger, our focus turns to the buyer's response. We anticipate the emergence of rejection or engulfing candlestick patterns, indicating the return of buyer interest. These candlestick confirmations will provide the necessary validation to proceed with our trading plan.

It is crucial to stay informed and keep a close eye on AUDCHF's price action. The Nexus Hub will serve as your resource, delivering timely updates and the lower time frame entry game plan as the higher time frame confirmations align.