US dollar bulls fade as FOMC minutes meet expectations

Leading up to today, US dollar soared against just about every other currency as the market prices in the following expectations for the rest of the year.

Summary of Key Events:

  • US inflation has run its course approaching the Fed’s 2% target
  • Fed’s continue to demonstrate a cautious tone as inflation is not rapidly accelerating
  • Markets have priced in the 3-rate hike this year expectations
  • Fed’s economic policy made no mentions of geopolitical and trade risks especially with China
  • US trade delegates are expected to meet with Chinese officials over next two days, US dollar expected to pick up if trade tensions ease

My trading has been kept to the shorter timeframes given the major movements on most pairs.

While I did not takeĀ  trade on EURUSD, I figure this is worth mentioning as it broke through a key daily level and is now testing another.

Screen Shot 2018-05-02 at 9.53.26 PM
EURUSD 1-Day

I was watching this daily range for quite some time, but unfortunately I missed the breakout opportunity. Seeing as how this pair failed to retrace to near the breakout level, I did not have a post-breakout short entry opportunity.

Screen Shot 2018-05-02 at 10.27.50 PM
EURUSD Hourly

What i will be looking for on the hourly timeframe is any signs of weakness. Given that this pair is in a downtrend, I will be looking out for any signs of price failing to break lower. Given by the spike down a little bit after noon today, price has been recovering ever since. I would consider shorter term intra-day long entries if this “recovery” pattern is present.

Moving onto the trades that i am, the first is AUDCHF:

Screen Shot 2018-05-02 at 11.18.49 PM
AUDCHF 4-Hour

Seeing the rally on USDCHF, the Franc was definitely on a weaker note and I took the opportunity on this pair. Seeing the weakness in the sellers, I entered long as this pair tested an intraday level. My potential daily resistance is set for 0.753~ so I have my take profit set below that accordingly.

Screen Shot 2018-05-02 at 11.29.36 PM
EURJPY 6-Hour

Exactly as annotated, I took this trade as price held resisted on a daily level that previously acted as a support. At the same time, my shorter period moving averages crossed below my longer period MA signalling and adding additional confirmation to a bearish trend. I am simply riding the next leg down. After moving my stop loss to a bit above breakeven, my short term target is 130.4~. This is where price last stalled at.

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