Mixed market reaction to FED

One of the most anticipated market events came today and market’s reactions were mixed. As expected Federal Reserve kept interest rates unchanged. Dollar initially fell, then rose and then dropped again. This kind of reaction must have cost a lot of market participants a lot of money. Those that tried to trade in both directions must have lost money. Of course, these kinds of things do happen. One has to be very patient and not to give in to despair when a streak of losses occur. It is far more important to follow your system and trade with discipline. 

Two key events are in the horizon. One is Bank of England rate decision that is due tomorrow at 11:00 GMT. I have intentions trading British Pound against one of commodities, possibly New Zealand currency. The same can be said about the other event: European Central Bank interest rate decision coming at 11:45 GMT. I will probably be looking at eur/nzd pair to make a long or a short trade. Non Farm payrolls will surely be the last risk event this week. I see gold as of particular interest for this event. It has risen quite a bit in the last month and will probably correct itself to make new lows in the coming weeks. Let us see what happens tomorrow though. Do not overtrade!


I also suggest you reading my post: http://forex-news-trading.blogspot.com/2013/08/ultimate-guide-to-successful-day-trading.html

Friday fx news: job data

Friday has come and it promises to be very wild indeed. We have Non Farm payrolls and unemployment rate from United States at 12:30 GMT, as well as net change in employment and unemployment rate from Canada at exactly the same time. This data usually creates very volatile moves in the markets. I expect today will not be an exception to the rule. I hope you saw what happened yesterday when both UK and ECB released interest rate decisions with the comments that followed. Traders lost their heads by trying to short British Pound and Euro. Swiss Franc collapsed like a rock into the water. Remember most European currencies usually move in unison. Franc seems to be the weakest ‘guy’. 

What about other currencies. I assume that US dollar and Canadian dollar will move in unison today too. That’s what usually happens. Either both fall on the news or they both rise. Have this in mind when you place your trades. Gold in most cases falls when Non Farm payrolls comes out. I do not know why, but that is my experience. So, choose appropriate level to enter a short order in gold and if market goes down, so will you. Do not forget to set your stop and take profit orders though. So, a few hours left till the news. Let’s see what happens.

Key Forex releases this week

Hi, fellow traders. This week is very rich in Forex events. You can expect a lot of volatility and choppy price action as well as huge moves in various currency pairs before and after the releases. Something has already been released. Basically (Japanese) Tankan Large Manufacturers Outlook, which can slightly better than expected (10 actual versus 7 expected). That came at 23:50 this Sunday. However, Japanese Yen continued falling. It tells me that the bearish bias is very strong in Yen pairs. What are other key events for the week?

Monday

China – Manufacturing PMI (came as expected 50.1 at 01:00 GMT)

EU – Euro zone Consumer Price Index (coming at 09:00 GMT) 

US – ISM Manufacturing (coming at 14:00 GMT)

Tuesday

AUD – Reserve Bank of Australia Bank decision (coming at 04:30 GMT). Australian dollar might recover (at least short term). 

No key Forex news on Wednesday

Thursday

GBP – Bank of England Rate decision (coming at 11:00 GMT). It will have huge impact on British Pound pairs. I expect major moves in gbp/chf and eur/gbp and a possible reversal in gbp/usd pair. Traders will also be looking at BOE Asset Purchase target coming at the same time. 

EUR – European Central Bank Rate decision (coming at 11:45). It will probably be the most important event of the week. Need to see if they have a press conference after that and when. 

Friday

USD – Unemployment rate and change in Non Farm Payrolls (both coming at 12:30). The second most important event of the week. Hope to see currencies flying after the release.

CAD – Canada Unemployment rate and Net Change in Employment (coming at 12.30). Canadian dollar pairs will be hit. 

Ok, I guess that is it for the week. We need to wait for the first releases to see what happens. I will update on that tomorrow.

No surprises from Central Banks

ECB and BOE delivered their rate decisions yesterday and market wasn't surprised by the results. There was some suspicion as to whether European Central Bank would cut interest rate or not, but as we see they did not do it. Furthermore, the sentiment was that Draghi will speak in dovish tone and he did not. So, eur/usd rallied immensely and so did gbp/usd.

If you look at price action today you see sharp corrections taking place. gbp/usd is down by more than 100 pips and eur/usd about 75. And commodities lost almost everything they have gained.

Today is no less important day than it was yesterday. We have job data coming from both Canada and United States. So, you should not be surprised by consolidations taking place in both the greenback and the loonie. Let's see what today brings.