Forex Trading TV Video Blog

The USD lost over 100 points in trading yesterday against the Euro. The pair ultimately closed at 1.5665. Except gaining vs. the JPY, the US dollar lost versus the rest of the major currencies yesterday. A possible explanation for this general deprecation of the greenback can be found in yesterday’s news events. The FOMC Statement was less hawkish than expected after the Fed decided to leave interest rates unchanged at 2.00%. To demonstrate this, here is an example of assertions that were made during the FOMC Statement by the Fed: “uncertainty about the inflation outlook remains high” and “the upside risks to inflation and inflation expectations have increased”. The balance of risks is shifting and the USD will continue to be under pressure for as long as the “inflation situation” remains unclear.

Yesterday’s fundamental data came out with mixed results bringing no relief for the US dollar. The Core Durable Goods Orders and Durable Goods Orders came in as forecasted at -0.9% and 0.0% respectively. Though the Durable Goods Orders demonstrated a rising trend, the more essential Core Durable Goods Orders displayed a declining trend. On the other hand, the Crude Oil Inventories grew from -1.2m to 0.8m. The closing event of the day was the Federal Funds Rate which, as explained above, remained unchanged at 2.00%.

Today should be calmer than yesterday as fewer affecting events on the greenback will be published. The final GDP should rise by 0.1%. The Unemployment Claims should shrink by 6k. The vital Existing Home Sales indicator might rise by 0.7M. The Natural Gas Storage is expected to be released as well. On the whole, the USD should be on the rise as it is implied by the impending indicators of the day.

Today, investors might need to be ready to take the opposite position from yesterday. The reason for this is the new direction that can be derived from the indicators. Thus going long on the USD could be a good strategy today.

Yesterday, traders who went long on the USD saw some significant profits. The greenback gained 142 pips against the EUR, reaching the low of 1.5468 during yesterday’s trading session. The GBP\USD depreciated from 1.9755, down to 1.9594. The USD\JPY ascended from 107.25, up to 108.00.

Even though the USD was absent from the economic calendar yesterday, it nevertheless strengthened as a result of some very gloomy indicators published for the EUR, especially in Germany, which is considered the strongest and the most important economy in the Euro-zone. More support for the USD came during last Wednesday’s Fed announcement, that ensured U.S Interest Rates will remain intact after a string of cuts since September, calming the rising inflation.

As for today, a batch of data is scheduled for the USD. The first one on tap will be the U.S National Home Price Index. This indicator measures the annual change in the average price of a single family home in 20 metropolitan areas and is expected to decrease by 16.0%. Later, on 14:00 GMT, several additional indicators are scheduled to be published. The most important will be the Consumer Confidence, which measures the mood of consumers in regard to economic conditions. Despite the recent boost in retail spending, U.S consumers haven’t been feeling any more optimistic recently. As evidence, last month’s index fell to a 16-year low, printing at 57.2. This month, analysts forecast it to drop even further, probably to the level of 56.4. The House Price Index and the Richmond Fed Index are also scheduled around the same time; however they are not expected to have a large impact over the market. Today could be a great opportunity in the Currency trading Market to take advantage of the USD’s movements and gain profits on USD pairs.