How are forex markets looking now the FOMC dust has settled?

Here we after after another FOMC rate hike and in the end, that played second fiddle to the Trump n Trade show. The Fed hiked, a word was removed from a bit of paper, and the market is happier about what’s to come in 2019. You won’t read analysis any simpler.

The initial reactions to the FOMC were pretty muted. The main intraday levels held in a lot of pairs, with only the aussie really cracking on its run through 0.7300. What shook things up was a barrage of Trump comments which brought the focus right back on all the trade issues and put a pin in risk.

Let’s be honest here. While the FOMC was a big event, the whole central bank and fundamental landscape is currently a poor side show to trade worries, and it hasn’t taken long to shift back into those.

For FX markets, even with the FOMC and Trump, we’re still in the same ranges we were before yesterday. Levels broken on the chop are re-establishing themselves and older levels have shown their mettle. There’s been nothing game changing from the Fed so there’s little to change the trends on that. Trade is the driver and we’ll flip between headlines again. For example, CAD is suffering on the Trump’s supposed snub of Trudeau and the likelihood that we’ll pass the US deadline on getting an agreement. If only I got filled on my USDCAD long idea from Tuesday, I’d be laughing now but it emphasises my point.

The charts are pretty clear and concise on where the levels are so draw your lines and trade them appropriately. If what’s broken, stays broken, then those moves will continue. If what’s broken gets retaken, then a reversal is in play.

Keep in mind the end of month/quarter stuff that might be flowing about still, and just trade what you do see, not what you want to see 😉

Ryan Littlestone

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