The release of the 16-17 September 2014 #FOMC meeting minutes saw an immediate sell-off of the US Dollar against the major currencies and some commodities such as #gold and #silver, the #DOW and #NASDAQ rose on the release of the meetings.
The #USD has enjoyed a bullish run recently, after last friday's better than expected Non-farm payroll report and a surprise drop in unemployment below 6%, some investors (including myself) may have thought the rise of the Dollar would continue into this week, however that hasn't been the case. It's difficult at the moment to tell whether this move is a reversal or retracement.
So how as traders could we trade the release of the minutes?
It's more difficult to trade a report such as minutes as you can't just look at a number and decide whether its good or bad and then jump in the market. Instead the information of the minutes need to be deciphered.
You can read the full meeting here but reading it during the release could be time consuming, you are probably better off listening to a quality live news feed such as Bloomberg TV. When the minutes are release the presenter will give a comprehensive breakdown of key points which many investors would be interested in.
I won't go into the full details of the report, I will let you read it for yourself. However in a nutshell it doesn't seem that the FOMC are in a hurry to raise the interest rates, due to economic problems within Europe and there is a worry the value of the Dollar is too high.
So now we decided the direction we want to enter, the question is where and when do we enter? If you wasn't lucky enough to have a good trade in before the release of the minutes, then a short-term entry strategy is as follows:
If we switch to the 5min chart, we would see a large upward move in price, don't jump in on the moving price! Wait until a support/resistance is formed and then broken, when price retraces back to this level then you enter your trade in the direction of the initial move.
Below is an example on the EUR/USD, this is a short-term trading strategy there are long-term strategies that I will discuss another time.
The blue line is the entry level, the green line is the take-profit level and the red line is the stop loss.
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Good Luck!!
Labels: Dollar, DOW Jones, EUR/USD, Euro, Forex, FX, NASDAQ, news trading, trading strategies
