To those of you who are subscribers to our Money Trader service, you're loving your USD/JPY position right now. Its up comfortably. So with profits locked in and room to go, we're looking good.
The two most important things to watch out for this week are Wednesday's 215pm EST Fed interest rate announcement. The other is Friday's payroll data (NFP). Both could be big contributors to where the USD goes in the near term.
Generally the majors (EUR/USD, GBP/USD, etc) will start trading "somewhat light" a day or two before a Fed meeting as no big interbanks want to put on any positions of any size right before an "unknown" such as the rate decision and the payroll data. So expect a response more after the Fed announcement and before NFP (payroll data). It should be an interesting week after a week or two of light data and little fundamental data to go off of.
Eventually there will be a catalyst for a short term bounce upwards on the U.S. dollar just due to the fact that its grossly oversold in the short term. Afterwards, however, you'll likely see the downtrend resume since its unlikely the U.S. economy is about to turn around on a dime.
Currencies are like ships, they take a bit to make a turn. Why? Because economies don't turn overnight so neither do their currencies which are the embodiment of what traders think about the economy at the time.
Sean Hyman
Currency Director
www.money-trader.com
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