Does news move markets?

A very interesting question just came up in the Facebook Group about the Australian Dollar, which took a large dump in a short period of time


Now this coincided with an RBA speech (where they talked about cutting rates), and it’s good practice to be aware of announcements. The website I personally use is https://www.fxstreet.com/economic-calendar

Which brings us to a rather existential chicken-egg type question.

Did the announcement make the Aussie dollar drop, or was it going to happen anyway?

Here’s the thing. The announcement caused the dollar to drop, but it can only drop hard if the price action is also weak. And predicting announcements is a fools errand.

Here we have an upper Bollinger reversal after a low volatility extreme.

Then we have a retest variation sell setup (from the Price Action Masterclass)

Keeping in mind the Monthly chart sell signal (that I’ve been underwater on for the last few weeks) is still in play.

Yeah, it was a big move. But also a lot of factors lining up to support it. I’d expect the AUD and AUD crosses to be great trend continuation plays for the next week or so at least.

Mostly, fundamentals are all priced in, and not that useful for trading. But the fundamentals you want to look for are what Seykota used to call “surprise-a-mentals” where people haven’t quite figured out the implications.

An example of a surprise-a-mental would be realising early that Google was going to make a monopoly of search, or that the Iphone would revolutionise consumer devices.

There is a great setup in all the bonds today (look at TBT and TLT for ETF’s)

Here it is in the 30 year Treasury bond

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