USD Weakens Further Fed Ignores Bad GDP April 30, 2015
US GDP Craters to .2% While Fed Still Threatens Rate Hikes
It appears as though the big boys arent so keen on believing that the Fed will still be raising rates any time soon. With US GDP dropping rather close to zero the USD weakened further yesterday even though Fed puppet Hilsenrath reiterated that they havent changed anything and rate hikes are still on the table.
For now the Fed isn’t signaling any shift in its policy stance. It repeated it would keep its benchmark short-term interest rate, the federal funds rate, pinned near zero, where it has been since December 2008. Officials in March opened the door to rate increases later this year, by removing from the policy statement assurances rates would stay low.
In other words they will either threaten rate hikes until all data smells of a pig pen or they may actually hike rates just because they really do need to whether the economy can handle it or not letting the chips fall where they may. However I still have to agree with those that say they will be doing QE 4 long before any rate increases. Remember Bernankes “Not in my lifetime” statement on rate normalization once he could actually speak some truth after leaving the Fed.
EUR/USD Blasts Through Monthly Highs to Test March Open
The 225 pip push yesterday does leave direction more open today even though it does seem more bullish. The blast through the monthly highs has opened the door to run as high as the 1.1450 area even though it should get some resistance around 1.1270 where the March highs sit. Otherwise we do have some solid daily conviction and the move was rather efficient. The best level for the long is at 1.1093 or just below but if it does break down then a test to the daily 1.1035 may be in store. Otherwise I will be open for the short from a stop run to the highs around 1.1172 but would prefer to be long waiting for a break upwards.
GBP/USD Likely To Test Feb. Highs At daily 200
The GBP/USd did make another push upward after showing the hourly conviction yesterday. Although I do expect a test to the February highs before it finds any solid resistance I will be open for the short while its in these extended pushes. The best level for the long today is 1.5393 but may test as low as 1.5347 even if its unlikely due to the proximity to current price. Otherwise I will be open for the short from the 1.5486 highs but will need some solid price action showing they cant find buyers above.
EUR/JPY Runs Second And Third Push Following EU
I will be open on direction for the EUR/JPY today but if the EU is going to push up this pair will likely follow. It has ran the second and third push yesterday but also has a 100 pip reversal of which may be all they wish to push it down. The best level for the long is around the 132.00 level but they could push to the lows of the hourly pin as well. Otherwise the Asian range is wide enough to use its lows but would be best to see them leave some room and hit the breakout traders first. I will only consider a short from 132.75 and need to see the EU holding down as well.
Forex News Today
The calendar today has a rare treat with a BOJ Press Conference just before the London open so that could be interesting. They seem to be hog tied at the moment but any more signals of further QE should get the Yen crosses running.
During London there is Spanish GDP and German Unemployment data that has potential to create the next move on a big miss but otherwise may also be priced in pretty much. The ECB Economic Bulletin could be interesting as well so I will be keeping an eye in it. Later I expect the Euro Zone CPI would have the larger impact on a big miss. Expected below zero again but if it can mange a surprise above then the Euro should keep getting stronger
The US Has Thursday Unemployment Claims expected close to the 300K mark again. At this point the chance for a miss above 300K is good considering the last disappointment. If it is then we should see added USD weakness
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