Basic Forex Strategies Part 3 – Using News Press Releases To Trade With Forex

On of the factors that most influence currency market, especially on the short term, is economic data. Forex market is open 24 hours, and trades currencies from the four corners of the world, therefore the amount of data that flows into the market everyday is remarkable.
Paying attention on the economic data related to the eight main currencies is a very important forex trading strategy, which gives countless trading opportunities, as there is always something that can move the market.

The first thing to consider is the group of main currencies

• US dollar (USD)
• Euro (EUR)
• Britich pound (GBP)
• Japanese yen (JPY)
• Swiss franc (CHF)
• Canadian dollar (CAD)
• Australian dollar (AUD)
• New Zealand dollar (NZD)

The main exchanges involve the following currency pairs: CHF/JPY, EUR/USD, USD/JPY, GBP/JPY, AUD/USD, EUR/CHF.
Based on this narrowed down list, depending on the pair we are trading, the press releases to focus on should be those coming from the respective countries. However, US economic data is the one with the highest influence.

Using news releases as a forex strategy is not as easy as it may seem. The market is not only influenced by events actually happening, but also by forecasts and rectifications of future events.
Moreover, some press releases are more important and influential than others, depending on the country that issued them, and on the other releases of the same period.

Below, the hours when the main news are released for each currency:

USD     8:30 - 10:00 (EST) – 13:30 – 15:00 (GMT)
JPY    18:50 - 23:30 (EST) – 23:50 – 4:30 (GMT)
CAD    7:00 - 8:30   (EST) –  12:00 – 13:30 (GMT)
GBP     2:00 - 4:30 (EST) – 7:00 – 9:30 (GMT)
EUR  (Italy) 3:45 - 5:00 (EST) – 8:45 – 10:00 (GMT)
EUR (Germany) 2:00 - 6:00 (EST) – 7:00 – 11:00 (GMT)
EUR (France) 2:45 - 4:00 (EST) – 7:45 – 9:00 (GMT)
CHF 1:45 - 5:30 (EST) – 6:45 – 10:30 (GMT)
NZD 16:45 - 21:00 (EST) – 21:45 – 2:00 (GMT)
AUD 17:30 - 19:30 (EST) – 00:30 – 2:30 (GMT)

From a content perspective, these are the most important things to focus attention on:

• decisions regarding interest rates
• retail sales
• inflation
• unemployment rates
• industrial production

The importance of these single factors can vary depending on the country and on the moment. It is therefore important to understand on which data the market is actually focusing on a given moment.
Another critical aspect of forex trading strategies based on press releases is to estimate the duration of the effects of a certain event on the market. It could be hours or even days, but generally even the effects will not last more than two days, even for most important events.

Check out part 1 of Forex Trading Strategies and also this other hub on forex signals providers.