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

US dollar bearish after FED

Market participant expected to see more bullish FED minutes today, but Federal Reserve committee published slightly more dovish report that most traders expected. As a result US dollar fell, together with major stock indexes. On the other hand, the minutes are quite positive about the path US economy is taking with a slight concern about employment situation. If that improves the stimulation process would end sooner rather than later. Most speculators expected more hawkish statement though. 

Anyway, there is one more risk event lying ahead of us today and that is Ben Bernanke’s press conference coming in less than one hour. This can turn things around and US dollar may rebound or continue falling even faster than after minutes. Oil as you may see is rising. It has broken key resistance levels and is probably headed to all time high at 150 dollar per barrel. Gold seems to have formed double top on hourly charts. This is not a very serious indicator since it is on hourly charts, but I still see it as a possible sign of a reversal and going down to 1180 low that was reached at the end of June. I am also bearish towards S&P500 and other stock indexes.

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.