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Fed Says No Future Hikes Any Time Soon – Daily FX Analysis 1/28/16

EUR/USD Back to “Pre-Draghi” Prices

On the 21st of January we had a major spike down after the Draghi comments. As of today we have reclaimed those “pre-Draghi” prices. One thing I have always noticed about fast moves in the market is that they almost always tend to be retraced. I term these moves as inefficient moves and because very little trading or less than the normal trading occurred between the start of the move and the end, those moves will typically retrace. This is done in an effort to facilitate normal trade at those prices. The original direction of the move will often see further follow through, but not until the market retraces back to the start of the move. Since we have retraced that move I do look at the current highs as a key line in the sand type of level. The GBP/USD has also given a potential first push down which does support a further move down as well. With that being said, unlike the GBP/USD, the EUR/USD is not in a current short term market cycle according to the rules of our online forex course. Therefore, I will continue to trade any valid stop run from the pre-selected manipulation points listed on the chart.

EUR/USD Chart - January 28th 2016

GBP/USD Gives 1st Push Down

At this point we will be looking for the second push to the downside. When we look at market cycle we look back over the course of 3 days on average. Because the previous move has been to the upside today’s move down gives a clear starting point to this potential cycle. At this point it is a simple matter of where is the liquidity. If the price is likely to continue to the downside then it will likely start that move from a high liquidity point. Like always, for every buyer there must be a seller. Based on the rules we use for selection of manipulation points I will be looking at one point today and one point only. As you can see that point is listed on the chart and I will be looking for a stop run to occur from that level. 

Like always patience is the key and discipline is crucial. We do not try to catch every move, we only try to catch the moves that gives us the very specific setup we are looking for. Becoming a successful forex trader is about taking quality trades not quantity which is critical to remember.

GBP/USD Chart - January 28th 2016

Forex News For January 28th 2016

UK Prelim GDP q/q 4:30 AM Eastern: UK GDP has been a big market mover historically. With that being said, during the last 9 months we have had 3 deviations from the expected number and every single time the market reversed after the first few minutes and pushed against the news. While this is not a guarantee, it is a great reason to not expect continuation in the direction of the initial spike. For this month .5 is the expected number.

US Core Durable Good 8:30 AM Eastern: This has been a news event that is right on the edge of me taking off the radar. For the last 6 months we have only seen 1 spike that would really concern me and like a lot of US data the market has been losing interest. If I was in the green by 10+ pips I would probably continue to hold into this news event. With that being said, any trade under that number I would be closing ahead of the release. This month 0 is the expected number.


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