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[Crazy Cat]

Hey folks,

Sorry about the late signal tonight, but my internet is having a few issues and kept me offline for a bit. Anyhow, we saw a very hefty Turn Around Tuesday on the EU and GU, but for now it looks to be just more range trading in its consolidation range and I think the rally is something that should be shorted and position trades sells should hold their course. The tipping point/mental threshold is around the June 3rd and June 11th highs which means a break of 1.4190 on EU, or 1.6666 on GU would be enough to consider reexamining the situation and trend. Until then though, rallies are good for shorting and should play lower into the 4hr chart range. For more of a short term play, the EUR/USD has formed a tight consolidative range from about 1.4060 to 1.4110 and a break out from that range should see some follow through. For news Wednesday, there are smaller reports such as the Durable Goods and New Home Sales, but neither is going to be a reliable trade as the markets await the US FOMC interest rate decision, so we'll put our focus there:

1415 US FOMC Interest Rate Statement (expected to keep rates steady at 0-0.25%) - All the tradability on this event comes from the statement itself, as the likelihood of an interest rate move here is basically zero. There are 4 things the market may be looking for that will have an effect on currencies:

Hints on future hikes - Any hint of hiking rates anytime within the next year will be USD bullish (sell EUR/USD), and the market is expecting the Fed to reassure that rates will stay low for some time, so I don't think there's a USD weak risk here.

Overall economic assessment - Pretty standard here... strong optimism is risk appetite (buy EUR/JPY) and pessimism is risk aversion (sell EUR/JPY). The market is looking for cautious optimism where they acknowledge some good signs, but ride the fence a bit.

Quantitative Easing/Special Programs - Any announced accelleration or expansion of quantitative easing efforts will be very USD weakening (buy EUR/USD), while any statements that hint that they are done with quantitative easing or looking to start withdrawing special programs will be quite USD strengthening (sell EUR/USD)

Interest on reserves - The Fed might help deal with their bloated balance sheet by announcing that they will pay interest on their excess reserves. Quite honestly, I'm not sure which way the market will take this, but I know it will have an effect. On the one hand, it could be seen as USD negative since it helps hold off the withdrawal of special programs or easing. On the other hand, it could be viewed as USD positive, since this may be the first step towards normalizing monetary policy.


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[Johan Stoop]

Hi Sir Pipsalot, (or is it Crazy Cat)?

Before I enroll for your monthly service at Forex Diamonds, it appears that you are covering or dealing your thoughts / methods regarding the trades you perform on obviously SHORT TERM.

I need to know if you cover and give your advice on MEDIUM to LONGER TERM FOREX trades as well. Please provide your time spans for each MT and LT if applicable.

I am going on a 2 week vacation, but on my return around 10 July I want to join as I battle myself, almost everytime finding myself on the wrong side.

Will this be in order?
Johan

[Sir Pipsalot]

I'd wait to make the most of your trial and join after you come back from vacation on July 10th. We cater to all types of trading from scalping, to swing trading and position trading. Right now we're a bit more focused on scalping and position trading for the month of July, but we try hard to identify the scope of any given opportunity. In general though, I would recommend joining up when you have some time to go through our educational materials and make some of our live scheduled trades so that you can make the most of it.