Wednesday's FOMC outing showed the Powell Fed to be less model-driven than its predecessors, but the lack of any language confirming four 2018 rate hikes sent the dollar plunging lower.
Day trade
Trade view / 27 July 2016 at 23:11 GMT

UPDATE: Hawkish FOMC statement could crush EURUSD

FX Trade Strategist /
Instrument: EURUSD
Price target:
Market price:

This trade almost worked, but it didn't. The original Trade Idea anticipated US dollar demand into the Federal Open Market Committee meeting and a hawkish statement. None of that happened.

Instead, EURUSD drifted higher and hung just above 1.1000 for most of the duration. The initial reaction to the FOMC statement seemed to be that it was hawkish and EURUSD dropped. That view changed almost instantly and EURUSD rallied to 1.1070 before drifting lower after the New York close.

Fortunately the loss was mitigated. Yesterday the trade was updated and it was recommended to close 1/2 the position at the market, which was only a loss of 0.004 points, and to lower the stop to 1.1035.

The stop was hit for a loss of 0.0052 points on 1/2 the position.

Original parameters

Entry: sell EURUSD at market (1.0983).

Stop: 1.1065.

Target: 1.0790.

Time horizon: four days.

— Edited by Gayle Bryant

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