Today was a very easy day. Along with dollar’s bearish movement this week, today’s 0.2% GDP number was absolutely horrid. To put that into perspective, GDP in January was 2.6%, Oct 2014 was 3.5% and July 2014 was 4.0%. With the morning GDP embarrassment I rode the dollar all the way down and was just shy of achieving triple digit profit for the afternoon. With EUR, GBP, and JPY making new highs, it came to an end when the unexciting and neutral FOMC statement released.
With the handsome morning profits I made, I was eager to finish strong for the day and had short dollar positions open. In my mind, there was no way the data dependent Yellen could possibly hint a rate hike anytime soon. However, to avoid huge shock to the market, the Fed’s statement was rather disappointing. The market translated the neutral statement by buying the dollar. I guess neutral news gives strength to the dollar when everyone was expecting a dovish statement.
I also participated in New Zealand RBNZ Bank statement at 5:00 and got some quick profits in from the dovish release.
Just want to add this possible USD/JPY long term trade I’m looking at now. In the picture below, you can see that the USD/JPY has formed a heads and shoulder pattern. Also, the two red lines indicates a strong support which prices bounced off multiple times. If and when price crosses the red lines, I’m predicting we’ll see USD/JPY reaching 117’s or even possibly 116’s.