Fed Interest Rate Decision, Will They Hike? September 17th 2015 Fx Market Analysis
Tomorrow is going to be the most important US rate decision in years. As of late the numbers look like a rate hike is not expected. Are we going to see a rate hike or not? That is a good question and one I don’t think anyone is placing heavy bets on. Today equities rallied beyond recent highs which does make me think no rate hike is expected. Remember things can change very quickly. A great example of that would be the GBP/USD. Tomorrow we could see the US Equity market tank before the news signaling an expected hike. With that point in mind I don’t think you can predict what the market is thinking until you see what US equities do heading into the actual news.
I have some serious concerns if they don’t hike interest rates tomorrow. Think about the signal that sends to the market. Remember the line of crap they have been feeding us for the last year? With every passing month they keep saying we are growing and things are looking better. If the economy is so weak that we cannot even hike .25% then I think all the talk of growth holds any water. The bottom line is if they don’t hike rates the signal of economic weakness will be heard loud and clear. Either way prepare for fireworks!
EUR/USD Provides ‘V’ Bottom Reversal
The V bottom type reversal move we had today is a form of a stop run. The initial move down creates selling pressure and the complete reversal and then some indicates the initial move was a false push down. Strong pressure, in this case buying pressure, often has continued follow through the next day. For tomorrow I believe continued upside in the EUR/USD is the highest probability.
Today the EUR/USD did provide a valid stop run long today. Overall the trade setup was quality but resulted in a 2% loss. If your a member make sure to watch tonight’s video preview for a full break down of that trade setup and analysis of it. Although I do hold a bias for a continued push up today I will still be trading the manipulation points to both sides of the price until the cycle confirms.
GBP/USD Surprises To The Upside
As you know, since the beginning of the week I have favored the GBP/USD short. If you don’t know why then make sure to check out the forex market analysis from Monday. Today is a great example of why we don’t just randomly take entries when the price reaches a pre-selected manipulation point. No trader will every eliminate all losses but additional filters helps reduce as many as possible. Even though we were favoring a short in the GBP/USD yesterday, no valid trade came together at our pre-selected manipulation point and therefore no trade was taken.
So many times traders focus on trade entry. They look at a day trading strategy and hyper focus on every possible way to catch every single type of market move. This is extremely dangerous! While it is important to have good trades, I firmly believe that the most important quality of a profitable forex trading strategy is its ability to keep you out of bad trades. Again, you will never eliminate all losing trades but you can use a day trading strategy that hyper focuses on taking only the best forex trade setups.
How am I looking to trade the Pound today? With the unexpected move today I feel like either direction is a possibility and therefore it comes down to the key to the bank trading strategy….selection of manipulation points. I will be taking any valid stop run from the pre-selected manipulation points listed in the chart. Keep in mind we don’t have a great deal of manipulation points to work with and we have a lot of free territory for the price to move. With that being said make sure to watch for news levels created through out the day. For any members make sure to watch the video preview for further details.
Forex News For September 17th 2015
UK Retail Sales m/m 4:30 AM Eastern: UK Retail Sales is a big market mover in the UK. Any deviation of .6 +/- from the expected number has a strong probability of making the short term trend for the day. This month .2 is the expected number.
US Philly Fed Manufacturing Index 10:00 AM Eastern: The month 6 is the expected number and a 6 deviation +/- will more than likely create a 15+ pip initial move.
US Fed Rate Decision 2:00 PM Eastern: This is without a doubt the big news for the day. Historically currencies strengthen on rate hikes and weaken on rate cuts or when they are expected to hike but keep rates unchanged. I would expect the same tomorrow for at least the initial move. At this point it looks like those who expected the hike are now moving towards unchanged at .25%.
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