USDJPy setting up nicely
See the chart is absolutely setting up for a beautiful move down. Remember, we don’t know what the market is going to do. That is the reason why have to hold unto your trading plan.
If price break and close below the upward trend line, you can go short. Since this is a 4 hour chart, depending on your platform my next four hour candle opens up at 9:00 am EST, that is 3:00pm CET for those like myself in Europe. So look at what happens. If the current 4 hour candle close below the trend line, then you may want to go short at 9:00 am EST.
The chart is explicit enough with the simple annotation. This is based on technical analysis. Remember the Federal reserve rate day and the statements usually will affect the move in the markets. For my daily trades I am done for today, 50 pips during the London Open taking from the 15 minute chart. See post here
Remember the USD Federal Open Market Committee Rate Decision (JAN 29) High Expected to leave at 0.25%. If you trade the news then this is usually big. I will be out of the markets as this happen. But if I have a break below my trend line, I will be entering the market with a mini-lot size until after the Fed’s annoucement.
The announcement of whether the Federal Reserve has increased, decreased or maintained the key interest rate. The FOMC meets eight times per year to decide on monetary policy. After each meeting policy decisions are announced. The main task of the FOMC is to set the monetary stance by fixing the overnight borrowing rate, which essentially sets short-term lending rates in the US. Through this mechanism, the FOMC attempts to affect price levels in order to keep inflation within the target range while maintaining stable economic growth and employment. The Federal Reserve’s Cash Rate Target decision significantly influences financial markets. Changes in rates affect interest rates for consumer loans, mortgages, bonds, and the exchange rate of the U.S. Dollar. Increases in rates or even expectations of increases tend to cause the Dollar to appreciate, while rate decreases cause the currency to depreciate. Unlike most central banks, the Federal Reserve does not announce an official target inflation rate, arguing independence and flexibility is necessary to implement monetary policy effectively.
The Federal Reserve issues a statement with every rate announcement. Because the decision itself is usually highly anticipated, the wording of the FOMC statement is usually as important if not more important than the actual interest rate move made by the central bank. The FOMC statement contains the Fed’s collective outlook on the economy as well as hints about future monetary policy while the change to interest rates is nothing more than a number. The statement provides clues on plans for the future.
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