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.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
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.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
