FED fails to push dollar lower

FED interest rate decision failed to push US dollar lower and Euro rally stalled. Japanese Yen also failed to drop further and may start rising bit by bit. Tomorrow we have Non Farm Payrolls data, which will be key event of the week. It may hint as to whether Euro rally will continue or not. It can also provide new optimism for Yen bears. If that fails we may see significant correction in prices as Yen will strengthen, particularly against British pound. gbp/jpy may collapse to 134.00 level in the coming weeks and eur/jpy to 113.00. 

Eur/usd will also down. At least short term correction to 134.00 level should take place. So, let us wait to see further development in price action after NFP.

Fx news of high importance this week

Let us look at some of the most important Forex news that might influence financial markets this week.

Nothing serious on Monday. Usual stuff!

Tuesday:  

Bank of Japan rate decision

Wednesday:

Consumer Price Index (Australia) at: 00:30 GMT

Bank of Japan Monthly Economic Report at: 5:00 GMT

Bank of England Minutes at: 9:30 GMT

Jobless Claims (Great Britain) at: 9:30 GMT

Bank of Canada rate decision at: 15:00 GMT

Thursday:

National Consumer Price Index (Japan) at: 23:30 GMT

Friday:

Gross Domestic Product (Great Britain) at: 9:30 GMT

Consumer Price Index (Canada) at 13:30 GMT

These are the main events that can influence move in currencies this week. Be careful trading those as volatility increases sharply during news times.

Bullish fundamental facts from Europe

ECB expressed its’ ‘sincere’ desire to address the European crisis and is again willing to do anything it takes to stabilize the region’ economy. These comments after interest rates announcements are very important as they usually give momentum for currencies at least for a few weeks. These are periods of time when a trader can accumulate a big position in a currency that is about to strengthen and keep it for a few weeks to make nice profits. That is exactly what happened in eur/usd or eur/jpy pairs. These macroeconomic news put Euro back on its’ uptrend and this tendency of Euro strength may continue for a few weeks.

I will repeat myself again that one should only trade in the direction of the main trend and never against it. So, after ECB and BOE announcements of interest rates have been made one can expect Yen and US dollar to weaken and Euro, Pound and commodity currencies to strengthen. Just be sure not to risk too much, nor to overtrade. These things never increase your profits. Vice versa, it impedes you to take the best possible trades that are on the table. Stay patient and try adding to your position on dips.

Nonfarm payrolls price action disappoints

Nonfarm payrolls data failed to create significant price action moves in most currency pairs. In fact, Friday was very calm in Forex market. Only scalpers could have benefited from the event. Other than that it was a pretty boring day. It is quite unusual for Fridays that often have huge market swings in most currency pairs and sharp reversals after weekly moves. 

However, it does not mean the piece of news will not have impact at all. Reactions often come after a day or in the beginning of a new week. The data that came out was slightly below market expectations, but it was still quite good. So, we have yet to see how big market dogs decide to push various currency pairs on Monday. 

I keep to my position that Euro will collapse soon and I think the move down has already started. Important support level has been broken. We do need some announcement from ECB or FED for the fall to accelerate and I guess it should come this month. It could be done during the announcement when interest rates are announced. I think it will be ECB head who will make a bearish stance against Euro.

Let us wait and see what happens this week. See you soon.