USD seems to be retracing upward ahead of FOMC events. Exhausted USD bears already made a bullish divergence:
If Federal Market Open Committee (FOMC) projects better data today compared to data projected on Dec 18, 2024; USD bulls will take out the previous high. Forex traders will focus on median data of 2024.
TRADING PLANS:
1. GBP/USD:
GBP/USD has been rising in spite of recent poor UK economic data by dint of bearish USD caused by Tariff war; poorer CPI, PPI and retail sales; etc.
So, selling GBP/USD can be a good choice after confirming USD bulls from FOMC projections today.
GBP/USD made a bearish divergence and seems to be correcting downard already. A 30% fall against recent up-swing is expected in case of bullish USD.
USD/JPY:
Unlike many USD pairs, JPY has already been losing against USD recently. So, buying USD/JPY may be another good choice in case of bullish USD today.
Recent upward move is bigger than previous one, which makes USD/JPY a better choice for bullish USD. A hawkish FOMC press conference and better FOMC projection today can make USD/JPY break previous high.
Note: We don’t have a trading plan for trading bearish USD today. So, we will sit on hand in case of dovish FOMC press conference and/or worse FOMC projection.
Q.: What may make FOMC press conference dovish? A.: If Mr. Jerome Powell seems pressurised to do more rate cuts and more frquent cuts. Trump has been demanding rate cut even since his inaugration in January, so we need to see if the Fed feels pressurized or not.
Comments