Current Market Sentiment – Forex Trading Tips

Jarratt Davis

Special Consultant to the FPA
There is no opening trade call as we await the US employment data on tap later today.Read through my analysis of the current market sentiment in order to prepare for the upcoming trading opportunities.

Current Market Sentiment:

Yesterday's NY session was dominated by the large load of data from the BOE. The MPC minutes showed only one member voted for a rate hike, while the market expected at least two members to do so. This was immediately bearish for sterling. MPC members saw downside risks to inflation in the near term due to lower oil prices. The stronger pound is expected to put more downside pressure on inflation as British exports become less competitive. The inflation report saw CPI not moving back to 2% until about 2 years' time and the BOE expects near-zero inflation for several months. The pound was pressured upon release. During the press conference Carney made some more hawkish comments, indicating that the Bank is still well on track for a rate hike in early-to-mid 2016

In Asia the Bank of Japan left its key interest rate range at zero to 0.1 percent as expected. It said it would continue to buy JGBs at annual pace of Y80 trillion. The vote to maintain its policy was 8 to 1. Takahide Kiuchi voted against the decision once again, arguing that a Y45 trillion pace of purchases was appropriate.

The RBA Monetary Policy Statement gave a boost to the AUD in Asian trading after inflation reports were revised higher along with an upbeat statement that left the distinct impression that the RBA is happy with the country's economic transition, the level of interest rates, and how far the Aussie has fallen. Interpretation, the RBA will likely continue to remain on hold for quite some time.

Coming up the London calendar is very light with Swiss Foreign Currency Reserves and UK Trade Balance data. The main event for the day comes in NY with the release of the US Jobs reports. Watch video overview here.

P.S - If you want to learn more about how I trade, check out the link below

Forex Peace Army - Jarratt Davis

Last edited by a moderator: