FED concludes its regularly scheduled policy meeting today. Announcement is expected in a little over two hours from now. No major changes are expected, but language will be the focus. I strongly suggest not watching CNBC for some time after the statement so as not to get completely confused by people looking for hidden meanings in the text. It can be excruciatingly painful to see otherwise rational people dissecting what FED is “trying” to say. On the other hand it could be comical.

Whatever the announcement brings, it will probably cause extra activity in all USD pairs, with a spill-over to Yen crosses as well. As always, I will not trade during this time.  Think it will be more interesting to watch Reserve Bank of New Zealand couple of hours later. Not going to guess what the outcome will be, but it could effect all other commodity currencies. Currently they are in a slump, but a raise in interest rates might just change it and set the tone for the rest of the week.

Unlike the day before FED statement last month, today has been very quiet for me. Just few very short term trades and nothing that had been discussed here before. At the same, more price history was created and I can place some new orders. For example, NZD-CAD looks promising for a buy. I’d like to go long at 0.7582 looking for 100-110 pips.

This set up comes with some caveats, though. If Kiwi reacts strongly to RBNZ announcement, trade will not be taken during the first hour after that. I simply don’t want to get in on a spike caused by overreaction to news. This means that I could miss the trade altogether, but this is one of the risks that I’m willing to take.

Yen still is making new highs against most currencies, but the movement has lost it edge. Everything is slower, swings are smaller. Meanwhile British Pound had a nice run up today and I want to see if this is going to last. We have a possible reversal in the beast. Hard to say right now if this is for real or not, but a move above 145.65 would have bullish implications, maybe even push the price to above 147. Tentative buy order is placed at 145.66. It will be suspended for the hour of FED announcement and reinstated once the dust settles.

One more order. A sell in CAD-CHF. I’m using 4H chart, with this large topping formation. It would be nice to see one more price run up away from the support. That’s just what I want to happen and it doesn’t meant that it will. Order is set at 0.9767. Objective will be 200 pips. Given most recent history of price movement here, trade could easily last 1-2 weeks. Any shorter is a bonus. OK, time to relax, watch for central banks do. It is fun when you are not sweating bullets.

Mike K.