There is a slew of fed speakers taking the podium today? Wondering what might happen to your positions? Refer to this guide below.
Source: http://graphics.thomsonreuters.com/F/10/scale.swf
This is their general stance. So if they speak accordingly, usually there is not much volatility. But if instead they changed their views and speak rather the opposite, expect for big movements.
source: tradingview
For the past few months, USD has been battered left and right. It weakened against almost all currencies. Well, mostly it was due to the FED. Nobody asked them to come out and gave a super optimistic rate hike forecast in 2016. They predicted they could do it 4 times. Well, obviously the markets did not take that well, sending the markets spiraling.
Then they got a little dovish in January. They said “they were weighing how the global economy and financial markets could affect the outlook”. But there was still hope for a March rate hike.
Then March came. They was a bunch of fed speak. Most of them seemed in favor of hiking the rates sooner than later. USD strengthened. But who would have thought it was being propped up for a bloody descent? The fed not only did not do any rate hike but instead they got so dovish that they could be fed sunflower seeds and kept in a cage. Ms. Yellen cut the forecast to two rate hikes and announced future rate hikes will be done gradually. She kept reiterating that term more than it was necessary. Naturally everyone got spooked and sold the USD like there was no tomorrow. But here was the twist. April meeting was apparently still “live”.
The whole world knew nothing was gonna happen in April as a strew of soft data came in, dousing any remaining flicker of hopes. The rate was unchanged in April as expected but the policy at least sounded more neutral. We are anticipating for the minutes of that meeting this Thursday at 2am. We are almost certain there would no rate hike in June with the impending Brexit referendum.
source: http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
But would there be one in July? If there were any hints of such rate hike, USD will strengthen significantly against most currencies especially against Yen, given that Mr. Kuroda and Mr. Aso has been repeatedly warning to intervene or ease as soon as this June 16. This would be just few hours after the fed rate decision. Imagine if fed hint at hiking and Boj eased, the divergence itself could bring yen to 115 to 118 range.
Well, I know it has been months since I posted the first and the last post. Started with the best of intentions to keep track of my thoughts and as source of justification behind my trades. I am not blogging to persuade anyone to try forex or follow my trades. God no!
I myself have no idea where the market is going. Despite trading for the past 3 years, I am still at times controlled by emotions which is a big no-no in FX. But unfortunately, we are mere mortals and inevitably we feel buoyant when the trades go in our way and helpless when it goes south. But as time passes by, I have learned to manage my emotions. I don’t cut loss when I panic, I don’t take profit impulsively or get into any trades out of whim. For every trade I get into, there should be a reason. Be it fundamental or technical. Factors such entry price, take profit, cut loss , position size, support region and resistance region should all be predetermined before opening the position.
Apart from the numbers, I will take note of the various news and economic indicators affecting the currency pair. This is where this blog comes in.My trading journal has ran out of pages and thus, I want to keep track of all my thoughts here.
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