Ellison EUR/USD Morning analysis 15/06
Yesterday we maintained bullish structure all day until we saw rejections with the release of FOMC, even though the news was expected and already priced in by the market.
Today we have the ECB's rate decision and the US jobless claims data at quite similar times. I will personally avoid making any trades until both of these events have passed and the market has settled.
I would only be looking for any further buys above 1.087. Otherwise, my general consensus is now sells. If we fail to break the current high and start to turn more bearish, then i believe the current bullish pullback on the overall bearish trend may be over.
Fundamental analysis:
FOMC recap
-Predicted a no rate change which was already priced in by the market.
-Copy and paste of the previous two FOMC statements too
-No new or exciting comments made by Jerome Powell in his speech.
-With interest rates now becoming less important for medium term, focus is now on data reports for the potential improvement of the economy.
Thoughts:
We predicted that the Fed meetings may be more dull and back to 'normal conditions' as the FED have already front loaded interest rate hikes. (This has been the most aggressive rate hike cycle in history and we as traders got to be a part of it). They can now take a slower meeting by meeting approach. This means they can watch data and make decisions over two to three meetings rather than the pressure of having to act over one month. With inflation trending down and labour market data tight, the FED can take their time with decisions.
Remember central banks want market stability, to keep volatility down and give minimal signals as they hold a lot of market influence. The covid money pumping phase and the 2022 rate hike cylce were both unique central bank events related to these crisis and combatting inflation.
DXY is still holding around 103 as markets expect higher US interest rates for longer than before.
Today we have the ECB's rate decision and the US jobless claims data at quite similar times. I will personally avoid making any trades until both of these events have passed and the market has settled.
I would only be looking for any further buys above 1.087. Otherwise, my general consensus is now sells. If we fail to break the current high and start to turn more bearish, then i believe the current bullish pullback on the overall bearish trend may be over.
Fundamental analysis:
FOMC recap
-Predicted a no rate change which was already priced in by the market.
-Copy and paste of the previous two FOMC statements too
-No new or exciting comments made by Jerome Powell in his speech.
-With interest rates now becoming less important for medium term, focus is now on data reports for the potential improvement of the economy.
Thoughts:
We predicted that the Fed meetings may be more dull and back to 'normal conditions' as the FED have already front loaded interest rate hikes. (This has been the most aggressive rate hike cycle in history and we as traders got to be a part of it). They can now take a slower meeting by meeting approach. This means they can watch data and make decisions over two to three meetings rather than the pressure of having to act over one month. With inflation trending down and labour market data tight, the FED can take their time with decisions.
Remember central banks want market stability, to keep volatility down and give minimal signals as they hold a lot of market influence. The covid money pumping phase and the 2022 rate hike cylce were both unique central bank events related to these crisis and combatting inflation.
DXY is still holding around 103 as markets expect higher US interest rates for longer than before.
Comment:
I read that perfectly. Trade taken on the 5 minute close after the uptrend was broken.
Being careful here as we have a heavy hour of news incoming.
Being careful here as we have a heavy hour of news incoming.
Comment:
I know I mentioned I wouldn't take a trade before the news. But I liked the set up, and the news stopped me out. Stick to your plan people.
Comment:
The ECB rate hike was expected, so I doubt this bullishness will last. Still potential for short set ups in the next few hours.
Comment:
Looks like those buys came in.
The ECBs comments after their hike contained strong Euro bullish sentiment, in the form of promises to keep raising rate hikes for the next few meetings.
The ECBs comments after their hike contained strong Euro bullish sentiment, in the form of promises to keep raising rate hikes for the next few meetings.
If the price closes below the previous higher low, I'll enter a sell.