Free Profitable Forex NewsletterÂ
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Hey! This is Philip with a market update of the Free Profitable Forex Newsletter!
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Dollar Crashed After Fed’s Emergency 50 bp Cut; Looking To Sell USDJPY Here
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The US Federal Reserve executed a rare policy action yesterday, surprising the markets with a 50 bp emergency rate cut in order to help ease the negative impact of the coronavirus epidemic (as they put it in the statement).
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The US Dollar naturally tumbled in response versus its peers, and US stocks failed to extend the gains. While the Fed’s action should help to stabilize stocks for now, the Dollar is likely to extend the decline bit further lower, given the surprise element and the size of this interest rate cut.Â
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The Dollar is modestly up today on a broad basis (Dollar Index bouncing), however, USDJPY is still likely to fall further driven by safe-haven flows and, additionally, by USD weakness - particularly now after the Fed’s big 50bp rate cut yesterday. The downside scope for USDJPY would increase especially if stocks don’t stabilize here and instead continue the bear market from the last week.
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Trend-following indicators suggest USDJPY has further to fall
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The trend on the charts is clear - it’s down. The 107.50 area is moderate resistance, which USDJPY tested today, and the bullish attempt was rejected here.Â
The clear support area to the downside is the Pivot point confluence zone at 106.25 - 106.45, as we discussed in our latest weekly analysis.Â
Momentum indicators are out of oversold territory on the short-term charts and haven’t yet reached oversold on the daily chart. Thus there is scope for further bearish price action from a technical perspective too, and it seems fairly probably that USDJPY should reach this (106.25 - 106.45) support area.
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The GMMA trend indicator is also suggesting that the retracement should be over, and the next leg down is about to begin or is already under way.
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Trade signals from the past week
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- February 28 – Short EURJPY from 119.85, target reached at 118.50 = +135 pips profit
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TOTAL: +135 pips profit in the past week
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TOTAL: +2870 pips profit since October 1, 2018
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Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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