If you are a trader who follows a news-based strategy, you are likely very interested in high impact forex news. Keeping track of these important news events can help you gauge market direction and adjust your trading approach accordingly. In this article, we have compiled the essential high impact forex news you need for your trading journey. Let’s explore them right below!
Why traders can’t afford to ignore high impact forex news
Understanding and monitoring high impact forex news is crucial for traders because:
- Direct market influence: The announcement can cause rapid currency appreciation or depreciation.
- Trading opportunities: High volatility creates both short-term scalping chances and long-term trend opportunities.
- Risk management: By anticipating news events, traders can better manage positions, set stop-loss levels, and avoid unexpected losses.
- Market sentiment insights: High impact news reflects investor confidence, economic health, and future central bank actions, helping traders make informed decisions.
See more:
- Top 5 Best Currency Pairs to Trade for Beginners in 2026
- NFP Forex Strategy: A Complete Guide for Every Trader
- How to read and use the economic calendar for forex in trading
- Forex Spread Explained: A Complete A–Z Guide to Understanding Forex Spreads
Top 5 high impact forex news in trading
Not all economic news can affect forex. The trader should learn to distinguish between high impact forex news and low-impact announcements. Below are Top 5 high impact forex news in trading that every trader must know:
Central Bank Rate Decision
Every month, central banks from various economies around the world meet to decide the interest rate they want to set. The decision they must make is whether to maintain, raise, or lower the rate. The outcome of this decision is extremely important for the country’s currency and for forex traders.
An increase in interest rates is generally proportional to a rise in the currency’s value, and vice versa.
When a central bank announces its monetary policy, it also provides an overview of the economy and future prospects. For example, since the ECB cut the Eurozone interest rate to 0.05% in September 2014, EURUSD has dropped by more than 2,000 pips.
Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is an important indicator of a country’s economic health. The central bank of a nation usually provides an annual growth forecast, and a country’s growth rate is determined by its GDP.
When GDP falls below market expectations, the currency’s value tends to decline, and when GDP exceeds expectations, the currency’s value tends to rise. Forex traders closely monitor GDP releases, as they can be used to anticipate central bank policies.
For example, when Japan’s GDP fell significantly by 1.6% in November 2014, the JPY dropped sharply against the US dollar as traders anticipated further central bank intervention.
CPI Data
The Consumer Price Index (CPI) is a measure of inflation and is the most widely used economic indicator. This index provides information on the average prices paid by consumers for a basket of goods and highlights whether similar goods are becoming more or less expensive for consumers.
Central banks rely on this index to guide their policies and interest rates. If inflation is at risk of rising, they may increase interest rates to curb it.
In November 2014, Canada’s CPI exceeded market expectations at 2.2% and reached 2.3%, causing the CADJPY to immediately surge to its highest level in nearly six years.
Unemployment Report
A country’s unemployment rate is very important for the currency market, because central banks consider it a key indicator of economic health. Higher employment can lead to rising interest rates as central banks aim to balance inflation with growth, which is why this figure attracts traders’ attention.
Along with the unemployment rate, the two most important labor statistics are the US ADP and NFP reports, which are released monthly.
FOMC Meetings
Although central bank meetings in all economies are extremely important, the meetings of the US Federal Open Market Committee (FOMC) are equally significant.
Each month, the committee meets to set interest rates and issue statements on economic conditions and the effectiveness of current monetary policy, providing guidance on expectations for future economic conditions and monetary policy.
Traders carefully analyze the committee’s statements to look for clues on how the central bank might act in the future. FOMC meetings can trigger significant market volatility, such as on March 18, 2015, when EURUSD surged 400 pips within minutes as investors anticipated a weakening USD following the meeting.
How to trade high impact forex news
There are many approaches traders can use when developing the high impact forex news strategy, which depends on the timing of the trade relative to the news release.
Pre-News Strategy
Trading forex news before a release can be beneficial for traders who want to enter the market during periods of lower volatility. Generally, more risk-averse traders adopt this approach to take advantage of quieter periods before the news is released, either within a trading range or simply by trading with the trend.
During-News Strategy
These forex news trading strategies are not for the faint-hearted, as they involve entering trades when the news breaks or immediately afterward. This is when the market experiences the highest volatility. Therefore, it is crucial to have a clear risk management strategy in place.
Post-News Strategy
Post-news trading involves entering the market after it has had time to digest the forex news. Typically, the market signals its future direction through price action, providing traders with significant opportunities.
Reliable websites and tools for viewing high impact forex news
There are many news sources and websites you can follow to stay updated on high impact forex news. Here are some popular sources you can refer to:
- Bloomberg: Bloomberg provides daily economic, financial, and market news, including updates on the forex market.
- Forex Factory: This website offers an economic calendar, news, and analysis related to the forex market.
- Investing.com: The site provides information on financial and forex markets, including charts and technical analysis.
- CNBC: This financial news channel delivers news and analysis on global financial markets, including the forex market.
Tips when trading high impact forex news
Trading during high impact Forex news events can be both profitable and risky. Here are essential tips for traders:
- First, traders need to expect volatility, as these news events often trigger sharp price movements and wide spreads, making it essential to check the economic calendar before trading.
- Next, using stop-loss and take-profit orders is crucial to protect your account, and traders should consider widening stop-loss levels during periods of high volatility.
- Another important point is to avoid overtrading, which means sticking to a predefined trading plan and not opening too many positions when the market becomes chaotic.
- At the same time, traders should monitor the economic calendar from reliable sources such as Forex Factory, Investing.com, or DailyFX, taking note of the time, currency, and expected impact to prepare an appropriate strategy.
- Finally, risk management is key, including trading only with risk capital you can afford to lose, limiting position sizes, avoiding excessive leverage, and being prepared for slippage or rapid market reversals.
Conclusion
To trade successfully, you must equip yourself with a wide range of skills, from fundamental analysis to technical analysis. Updating and analyzing high impact forex news will provide you with more basis for predicting the next price direction. Tipstrade.org wishes forex traders successful trading and high profits!