Summary
With uncertainties surrounding Trump’s fiscal policies and political issues which have resulted in some sort of discomfort generally, Grandma Yellen maintained a positive monetary outlook at yesterday’s FOMC meeting. I personally expected less of what she actually gave, less hawkishness. There is still a potential of upside risks as the forecasts don’t incorporate the possibility of Trump’s fiscal changes in a few weeks time. Fed presidents also shared the sentiments by stating that rates should be raised soon.
EurUsd Daily Chart
EurUsd H4 Chart
EurUsd H1 Chart
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2 thoughts on “EurUsd Short setup”
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Dear Tsholanang
Thanks for the trade plan. My only feedback is on your opening comments. Be careful of falling victim to hearsay, and here I am referring to the discomfort you mentioned surrounding Trump. It is very difficult to build a strategy on a gut feel, assumption or general speculation – try and stick to the facts.
Fact 1. The FOMC are going to hike rates this year
Fact 2. Yellen has confirmed that all upcoming meetings are live and that we need to pay very careful attention to labor market and inflation data
Fact 3. In a couple of weeks Trump is going to discuss a corporate tax cut plan – less corporate tax could mean higher wages in the long run. Higher wages = higher consumer spending and higher aggregate demand. This equals inflation.
While we need to pay attention to the above the market is not going to wait for these releases before going long or short. Traders are moving the market based on what is likely to happen in the future – that’s what pricing something in is all about. Note the facts, decide what you think is going to happen and then write up a strategy and trade plan accordingly. Including hearsay and gut feel sentiment with no evidence to back it up will throw you off course and create indecision. Imagine a hedge fund handling billions of Dollars telling their client – people are grumpy or suffering some form of discomfort over Trump with no evidence to back this up, not likely. They will look at the facts, present a strategy and tell their client how they are going to make them billions based on their understanding of the facts.
One last point – rather pay attention to what the central bank is saying and not the idiots on Bloomberg or Fox or any other news channel. News readers are paid to drive ratings and they are not traders – you know this when you hear them try to explain what RSI is coming off as if it is a leading indicator. How often have you seen a Bloomberg presenter freaking out about a pair dropping at the end of the week after being really bullish since the start of the week only to open your charts and see price coming off WM4/ WR2… Like duh, it’s called profit taking… You get what I mean… Look at the facts, build your own strategy and then trade plan it accordingly.
Capisce?
Best
Ryan Gandalf
Coach MetaTraders.com
Analyst Forex.Today
e-mail: [email protected]
Skype: Ryan.Gandalf
Thanks for that. Kapishhh!!