RBA, FOMC &ECB Rate Tango, Mastering Highs and Lows, EURCHF & CADJPY Money Makers

Hello, traders! Get ready for the latest market trends and expert advice in this edition of C&C.

What's to come:

☕RBA, FOMC, ECB: Triple Rate Tango!

☕Mastering the Highs and Lows: Secrets of Price Action

☕EURCHF & CADJPY Looks Like Money

🗞️Movers & Shakers🗞️

RBA's Rate Rumble: The Reserve Bank of Australia (RBA) played it cool last month, holding rates at 3.60%. With Q1 2023 inflation weaker than expected, traders are betting on another steady rate decision on May 2 (4:30 am GMT). If the RBA's announcement is cautious, the Aussie Dollar (AUD) might feel the heat, especially against safe havens like the USD, JPY, and CHF.

FOMC Showdown: Wednesday's FOMC meeting is the main event this week! Inflation's still high, and the labour market's holding up, so the Fed might go for one more rate hike on May 3 (6:00 pm GMT). But, with recession whispers growing louder, traders expect a modest 25 basis points hike to the 5.00% - 5.25% range. Will the Fed hint at a pause in rate hikes? Keep your eyes peeled!

ECB's Inflation Tussle: Now that the banking crisis is taking a breather, the European Central Bank (ECB) is rolling up its sleeves to tackle inflation. Will they raise rates by 25bps or 50bps on May 4 (12:15 pm GMT)? Most folks expect a 25bps bump from 3.50% to 3.75%. A surprise 50bps hike could send the Euro soaring, but a 25bps move would shift focus to the ECB's forward guidance during the presser.

NFP Razzle-Dazzle: Uncle Sam's labour market report is making its grand entrance on Friday (May 5, 12:30 pm GMT). To fuel rate-cut expectations, the market needs to see some job growth moderation in April, with non-farm payrolls (NFP) adding only 190K and the unemployment rate ticking up from 3.5% to 3.6%. Watch for average hourly earnings (0.3%) and the labour force participation rate (62.6%). Weaker-than-expected readings could spark recession concerns and boost safe-haven demand.

Economic Calendar

Mastering the Highs and Lows: Unraveling the Secrets of Price Action

Unravelling the secrets of price action trading can unlock a treasure trove of trading opportunities. By focusing on the highs and lows formed in the market, you can decipher the market's hidden messages and make well-informed trading decisions.

Let's dive right into the trader tip!

Understand Market Structure: Highs and Lows
In price action trading, recognizing the market structure is vital. You can determine the market's trend and potential reversal points by analyzing the highs and lows on the chart. This insight lets you make well-informed trading decisions based on price movements alone.

Identify Swing Points: Pivotal Moments in the Market
Swing or pivot points are the areas where the price changes direction, forming significant highs and lows. Watch for these crucial points as they signal potential entry and exit points for your trades.

Recognize Trending and Range-Bound Markets
A series of higher highs and higher lows indicate an uptrend, while lower highs and lower lows signify a downtrend. It is considered range-bound when the market moves sideways, forming roughly equal highs and lows. Differentiating between these market conditions is crucial, as it helps you adopt the right trading strategy for each scenario.

Master Price Patterns: Clues to Future Price Movements
As a price action trader, understanding common price patterns is key. Patterns like double tops/bottoms, head and shoulders, and triangles can offer valuable insights into potential market reversals or trend continuations. By spotting these patterns early, you can position yourself for profitable trades.

Combine Price Action with Support and Resistance
For even greater accuracy, combine your analysis of highs and lows with support and resistance levels. These areas, where the price has historically struggled to break through, can act as entry and exit points or serve as confirmation for your price action analysis.

Action Steps:

✅Study the market structure by analyzing the highs and lows formed on the chart.

✅Identify swing points and use them as potential entry and exit points.

✅Differentiate between trending and range-bound markets

✅Recognize common price patterns and combine your analysis with support and resistance levels.

Sip, Laugh, Trade 😁

📈Latte Line Up 📈

-EURCHF-

HTF(12-HR): Turning our attention to the EURCHF higher time frame (12-hour chart), we observe a notable development within the price action. Following a double top pattern, a recent break of the previous low has led to a new lower low. The price has retraced and retested the previous support level, acting as resistance. This area coincides with the 50% Fibonacci retracement level, adding further significance to the zone. The presence of a rejection candle at this area of confluence indicates the return of selling pressure.

To gauge the potential impact of this selling pressure, we'll shift our focus to a shorter time frame.

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LTF(1-HR): Zooming into the lower time frame of EURCHF, we discover an intriguing shift in market structure triggered by the rejection candle observed in the higher time frame.

The price action on the lower time frame reveals the formation of a lower low, accompanied by a retracement that has tested the previous 1-hour support level, now turned resistance. This retest adds weight to the significance of this level and reinforces its potential as a turning point for the market.

We'll closely monitor the price action for a strong rejection or engulfing candles to validate our bearish bias. These patterns will confirm the selling pressure and signal an opportune moment to enter a short position.

For risk management, placing our stop loss above the previous high, approximately around 0.9865, is prudent, safeguarding against potential adverse price movement. As for our target, we set our sights on the previous higher time frame low, located around 0.9770, offering a viable objective for our trade.