Hey tradomaniacs,
DXY (US-DOLLAR-INDEX) with the next attempt to break the trendline of the current correction❗️
EUR/USD orderflow has been bullish so far and if we see a break here we could finally get good momentums of majors vs USD.
The FX-market, especially majors-pairs continue to be very choppy due to the FOMC-Statement tomorrow. Why is that?
Because we can clearly see inflation with the previous data, while Jerome Powell pretends like there "is no inflation"!
Now it is going to be very tricky as he has to warrant a dovish monetary policy with a rising inflation.
For those who don`t understand:
If inflation rises, Central Banks tend to tighten monetary policy and either increase interest-rates or reduce the liquidity they provide to the market.
This is why usually US-DOLLAR moves up when we see positive economic data as the market prices in it is more likely to see rate-hikes in the future. (More interests = More return)
So, the problem is that the dovish policy by low interest-rates, quantative easing and stimulus has been the reason for the recovery.
To raise the interest-rates might not be an option, and I`m wondering whether Jerome Powell will finally confirm the markets expectations or not.
The questions are:
1️⃣ What is a "moderate overshooting" on inflation?
2️⃣ Will the FED prolong the SLR-relief? (If not, then Banks will be forced to sell Bonds = Rising yields)
3️⃣ Will the Fed try to contain bond yields?
We can expect the market to be helly choppy until tomorrow, which is the reason why I will probably stay out unless we see a valid strong momentum.
For now, buyers and sellers keep the price in a range with thin volume.
DXY (US-DOLLAR-INDEX) with the next attempt to break the trendline of the current correction❗️
EUR/USD orderflow has been bullish so far and if we see a break here we could finally get good momentums of majors vs USD.
The FX-market, especially majors-pairs continue to be very choppy due to the FOMC-Statement tomorrow. Why is that?
Because we can clearly see inflation with the previous data, while Jerome Powell pretends like there "is no inflation"!
Now it is going to be very tricky as he has to warrant a dovish monetary policy with a rising inflation.
For those who don`t understand:
If inflation rises, Central Banks tend to tighten monetary policy and either increase interest-rates or reduce the liquidity they provide to the market.
This is why usually US-DOLLAR moves up when we see positive economic data as the market prices in it is more likely to see rate-hikes in the future. (More interests = More return)
So, the problem is that the dovish policy by low interest-rates, quantative easing and stimulus has been the reason for the recovery.
To raise the interest-rates might not be an option, and I`m wondering whether Jerome Powell will finally confirm the markets expectations or not.
The questions are:
1️⃣ What is a "moderate overshooting" on inflation?
2️⃣ Will the FED prolong the SLR-relief? (If not, then Banks will be forced to sell Bonds = Rising yields)
3️⃣ Will the Fed try to contain bond yields?
We can expect the market to be helly choppy until tomorrow, which is the reason why I will probably stay out unless we see a valid strong momentum.
For now, buyers and sellers keep the price in a range with thin volume.
Re-entering EUR/USD with a low risk! Buyers still strong but as mentioned it is volatile.
Market-Buy-Order: 1.19360
Stop-Loss: 1.19080
Point of Risk-Reduction: 1.19581
Take-Profit: 1.19900
Stop-Loss: 27 pips
Risk: 0,5% -1%
Risk-Reward: 2,0
Chart for EUR/USD 👉
We are trading a breakout-retest scenario here! Watch it carefully and consider to early exit if all this is a fakeout! #Volatility