The event we, Forex Traders, have all been bracing ourselves for has been and gone and we have certainly seen some action the past 24 hours. Dean really nailed the levels by doing his Sunday prep. The FOMC left rates on hold with a hawkish bias for a December rate hike. But the more Janet Yellen spoke after the announcement, them more confused the picture became. Productivity this and inflation that … by the end it looked like that unless stocks were up in December there would be no hike. Added to the mix, the new US President will have only been in office for a month and are they going to want to raise rates after such a short time in the job? Sorry, the Fed is independent!
The Euro (EURUSD) rallied against the Dollar last night as the reality of no hike in September held true. FX traders did not want to be caught off guard by an unexpected hike and so pushed the market higher after the event. We opened this morning in Asian trade around 1.12 and are near the highs for the day at 1.1243. The European session gave the market the push this morning and we have gently followed through in the US session. Dean has his resistance at 1.1250 – 1.13 and it will be interesting to watch whether price will run out of steam here.
Cable (GBPUSD) has continued its expected move higher as the USD comes under pressure. It has followed a similar trajectory to the EURUSD and trading around 1.31 at the time of writing. A move of about 50 pips today and following Deans upward prediction. He has resistance at around 1.33 so we still have some way to go. As in the Euro, are we seeing a bit of profit taking or are we still going to push higher? A range of 90 pips against an average of 110 pips.
Upside momentum in the AUDUSD seems just to be wavering a bit at the moment. We opened today at 0.7640 after a strong move last night. A high of 0.7674 which was in Dean’s resistance zone and we are now trading off 30 pips from there. So far the resistance is holding firm and punching through that appears to be a challenge.
We opened this morning at 0.7364 in the NZDUSD and that remains the high. The market has drifted lower all day and now at the lows of the session, 0.7313. Dean had place resistance at 0.7360 – 0.7392 so seems to be spot on. The support he put in place is 0.7213 so this could be where this FX pair is headed over the next few days.
The Loonie (USDCAD) was Deans favoured trade of the last few days. There has been a big resistance level at 1.32 – 1.3240. The market briefly stuck its head above the trenches before having shots fired and heading straight back down. A nice 200 pip move and we are now trading 1.3025 having been down to 1.30. Dean saw a target of 1.3034 – 1.30 so spot on again!
We mentioned this morning that the Yen had smashed straight through our support at 100.5 – 101 and the 100 level appeared to be magnetic. The market opened at 100.5 and traded straight down to 100.09 and straight back up. Whether the BOJ has been involved or not, forex traders do not feel comfortable being short at these levels. USDJPY is currently trading at 100.83 and we will see if previous support now becomes resistance.
The USDZAR opened up at 13.57 and traded as low as 13.37 before moving back up. As discussed on many an occasion, Dean saw the move up as a gap and for those brave enough to sell around 14.50 – 14.75 would have been handsomely rewarded. We are now flat for the day and look forward to what Dean sees in the morning and hopefully many more pips.
Bank of England’s Carney speaks tonight and this may move the Sterling pairs a bit.
High Risk Investment Warning: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by BlackStone Futures you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. BlackStone Futures provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. BlackStone Futures recommends you seek advice from a separate financial advisor. Please take the time to read our Risk Disclosure Notice.
