Very quiet day today in currency trading. Both in movement and in volume. This extended across other financial markets as well. Seems that everybody is waiting for the decision from FOMC. What exactly are markets, and players, waiting to see? More rate cuts are unlikely, we are so close to 0% that making this number would be only a sign of desperation. What is possible, however, is more of quantitative easing from the FED. Whether it is renewed bond purchasing, or another scheme of this sort, it would amount to turning the presses on.
We will have to wait to see if the FED will demonstrate its independence, or will respond to pressure from vote scavenging politicians. A lot of analysts and economists are of opinion that any QE action now would be counterproductive, rather than helpful. I’m not even going to guess to what the announcement will bring, or the market’s response. True to form, I’ll just watch it. As always, there plenty of articles all over the web today “advising” on how to trade FOMC. Good luck to everybody doing it. If anything, once a trend emerges, I might try to join in later.
For today focus goes to short term trading, mostly the Yen pairs, 5M and 15M charts of EUR-JPY and GBP-JPY, excluding the time of FED rate decision announcement. Looking for simple breakouts through well established supports/resistances.
These are examples of what I’m looking for. Depending on particulars, objectives would be on a small side, anywhere from 25 to maybe 50 pips. Speaking of small pips, that’s what happened to trades in the Canadian Dollar, with the NZD-CAD featured here.
I was looking for post-weekend continuation of the Friday’s uptrend, lasting for a few hours and going short on a sign of reversal. There was some follow up to the earlier moves, not very strong, though. The reversal, however, was unmistakable, so I sold it. Objective was not very big, the 100 SMA as a support, but the moves today were so small, that the price didn’t even get there. Trade was closed late in a day for 29 pips gain. Given how little the rates change today, not a bad result, catching a good chunk of the price swing. Most of the CAD crosses behaved in similar fashion. Other possible trades mentioned on these pages and not yet filled are still valid, only that orders will be suspended for the FED news release, if not filled before.
Looks like short term JPY trades are already under way…
Mike K.
[...] short term interest rates were left unchanged, at 0.25%. Also, just like mentioned yesterday, the FED announced a new round of quantitative easing. On the surface this move seems to be a modest one, using the proceeds from the earnings on [...]
[...] short term interest rates were left unchanged, at 0.25%. Also, just like mentioned yesterday, the FED announced a new round of quantitative easing. On the surface this move seems to be a modest one, using the proceeds from the earnings on [...]
[...] were left unchanged, at 0.25%. Also, just like mentioned yesterday, the FED announced a new round of quantitative easing. On the surface this move seems to be a modest one, using the proceeds from the earnings [...]
[...] on hourly chart few hours into the action, with a bullish reversal candle as a signal. Just like last week with NZD-CAD. This is true for EUR-CHF and EUR-GBP as well. Also, the Aussie and Kiwi closed in similar fashion, [...]