GBPNZD Jumps Up 600 Pips In Minutes On RBNZ Announcement

When a central bank announces a rate change, it always moves the markets big times. This is precisely what happened when RBNZ announced a rate change last week. GBPNZD jumped up in just a minute. Take a look at the screenshot below. Can you see the huge price gap?


Many hours before the announcement a bullish divergence pattern appeared on the H1 chart indicating that the market was anticipating this move. So we entered in a long trade and placed the stop loss 10 pips below the bearish candle above marked with a yellow line.

Forex Factory

Above is the screenshot of the Forex Factory Economic News Calender. It is showing RBNZ ( Royal Bank of New Zealand) Rate Statement at 2:00 AM our local time. The good thing about this Economic News Calender is that you can adjust it to your local time. No hassle there. It will always display  the times according to your local time.

So we just opened a long trade, placed the stop loss and went to sleep. The next day we had made a profit of 600 pips. You don’t need to monitor the charts. The huge gap was there in the price as pointed out by us in the first screenshot.

As said above whenever the Central Bank changes the interest rate, it can have a huge impact on the market as our modern day financial systems are heavily depended on the interest rate. In this case the interest rate was lowered which forced GBPNZD to jump up while NZDUSD fell down more than 200 pips on that day.

If you are a currency trader, you should always check the Forex Factory Economic News Calender on the daily basis. This is what we do precisely every day in the morning. But looking at the Economic News Calender, we know at what time there is a high impact news scheduled. Now the market reaction is always an unknown. What we can do is look for the signal like the one above that we have cleared drawn with yellow lines. This was a bullish divergence signal. Now we don’t have any idea how big the market move will be. So we take care of the risk by placing a stop loss and let the market do its work. The market moved big time and in no time GBPNZD had jumped up 600 pips. Trading the news can be highly profitable if you can get the signals right. Otherwise you will find your stop loss hit instantaneously when the news get released.