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Good morning traders. The Fed spoke last night and the markets sort of yawned…well at least initially (apart from the usual whip sawing to catch traders offside).

However, we will get a better feel today as traders get to their desks and decide what to make of Powells pronouncements. The basic take from the Fed was a 25bps rate rise which was expected and a slight shift in language and economic forecasts out to 2021 with the expectation of one more rate hike this year and 3 next. All of this was pretty much anticipated but that’s not to say it won´t change the dollars strength or otherwise and thereby the rest of the currency market.

As we kick off this morning the most striking thing from the #eurusd perspective is that we start the day in downward mode. The Daily chart dipped under our range top level of 1.1750 ish and looking at the chart it does appear we may have some business with further downside for the time being. 1.17 is currently being tested and if that does not hold we could be headed to 1.1650 / 20.

EURUSD Daily Chart

On the H1 chart the TL that has been acting as a downside buffer since the lows were formed at 1.1530 ish has been breached with a number of hourly closes below. This also suggests further downside tests are on the cards.

For the time being my plan is to be looking for opportunities to short the pair until or unless we get any upside momentum to change my view. The upside targets we talked about are still in play as this could be a short term move but we will let the price action inform us. We always trade what we see not what we think. The market is the truth in this business not ´talking heads´.

EURUSD Hourly Chart

On a slightly different note, I mentioned that I would be ´scalping´the 5m chart while we waited for the FOMC last night.

The 5m chart below shows the levels I had marked out for possible intraday moves and you can see how price reacted at them. It´s always a good idea to have potential levels marked out on the 5m chart if you are able to be at your desk during the day as they often give you good short term entries to get in the market while we wait for rate announcements etc.

It is my method of trading although it is a full time job and only for traders who can devote large chunks of time to the charts.

If there is any interest I will do a webinar on this (and more general trading) at some point in the future. Feel free to post your thoughts or questions in our comment section below. I review them all daily and will come back to you.

EURUSD 5m Chart

Have a good one 🙂 !

Please note: All opinions expressed above are from the author and not necessarily shared by The Armchair Trader. All financial investments involve an element of risk. The value of your investment may fall as well as rise and you may get back less than your initial investment. With Spread bets and CFDs your losses may exceed your deposits.

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Mark Wogan

Mark Wogan

Hi. I started my investing / trading career in 2000 and since 2011 I have been trading on a full time basis.

My focus here will be the currencies and in particular the EurUsd pair and I will post my charts on a daily basis marking up the levels I´m interested in and comment on the bigger picture context and anything else I´ll be watching out for during the day.

I also do a little coaching on a one to one basis so if you´re interested in learning how to trade just give me a shout and we can have a quick chat.


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