Dollar had a sharp sell-off today after the FOMC statement with EUR/USD hitting a new 2 year high. The Feds left the rates unchanged, said inflation was still lower than 2% and said the next hike will be “relatively soon”. The key word, relatively, providing mystery and not much detailed promises. The strength of the dollar bears have been incredible for the last couple months and looks like it’s still going. For my trading, I personally kept it minimal since the market was slow and for a possibility that it can get chaotic post-statement. Now that dollar picked it’s trend, I’ll see if I can short scalp the dollar on it’s way down.
It’s been a hopeful opening week for the dollar and looks like a possible turning point. Especially in EUR/USD, price is at a major selling zone and there’s a lot of downward pressure. IF this week continues well for the dollar, there are TONS of pips to be gained.
Today was one of the most boring trading days we’ve had in a while. The dollar is at a detrimental low but a lot of traders are looking for a bounce recovery. The EUR/USD looked like it was about to dip today and tricked me into shorting it prematurely. Going to have to wait for prices to settle and to pick a direction to move.
The week finished off with dollar going lower. USD/JPY made a new low as well with EUR/USD making new highs. I was definitely off with calling a dollar reversal and with the GBP/USD pullback. Although I do still feel like pound is readying itself for a pullback as well with the Yen. So instead of focusing on the dollar, I think next week I’ll focus on Yen longs and Pound shorts.
Overnight I saw the GBP/USD building up for a wedge breakout and had a pending short in place. I made a horrible beginner’s mistake and set the stop loss a bit too tight. I wasn’t even planning on holding a position overnight, but the set up looked too good. Lesson learned here is ,once again, give your stop losses room to breathe.
I had a pending short right below the wedge support, but my SL was taken out right at the circled wick. I guess my inital entry wasn’t the best either, I didn’t take the spread into account and got hit slightly early. After waking up to my loss and opportunity cost of pips, I wasn’t in the proper mindset to trade.
The dollar is looking much better since the beginning of the week, but the pace of it’s recovery is still really slow. Although I predicted the direction of the dollar correctly, it’s the timing and scalping that’s been tricky. It’s really hard to trade counter trend and during a really slow market. On the bright side, if this continues for the dollar, there’s plenty of pips to be made during the EUR/USD, USD/JPY and GBP/USD pullback.
EUR/USD is at a very important zone where a deep pullback is more than likely to happen. The ECB doesn’t favor a strong Euro and the Dollar does not reflect U.S.’s improving economy. Even if EUR/USD is destined to break out and rise above, I think a pullback is highly probable.
I caught a short position pretty early, but the speed of the fall rate is pretty slow. I have my stop loss in place and hopefully it falls south from here.
Things still doesn’t look good for the dollar bulls. There has been some good scalping opportunities for some dollar longs but eventually, the dollar ended the day lower than week’s open. Right now the strong trend is still weak dollar. I personally can’t wait for a EUR/USD reversal to start but until then, it’s just quick scalping times.
Many traders, not just me included, have been waiting for the dollar to bounce the past couple of days. EUR/USD especially is at a crucial zone where a reversal can be quite possible. Yellen hasn’t been the best at boosting the dollar during the conference but the U.S economy is surely improving. Right now I’m scalping the dollar dips and waiting for a confirmed reversal.
The dollar’s price action has been really confusing so far. The battle between the bulls and bears seem pretty equal. During early London, EUR/USD has dipped from it’s previous highs but maintained to go down further during NY. I still feel like this is a zone for heavy EUR/USD selling, we just need a bit more volatility. I’m keeping my eyes out for EUR/USD selling.