Tamed FOMC Minutes to Fuel Bullish EUR/USD Sequence

Federal Open Market Committee (FOMC) to Endorse Three Rate-Hikes for 2017.

Will a Statement Highlight a Growing Dissent Amid a Downward Revision in Interest Rate Dot-Plot?

DailyFX 4Q 2017 Forecasts Are Now Available!

Trading a News: Federal Open Market Committee (FOMC) Minutes

FOMC Minutes

The Federal Open Market Committee (FOMC) Minutes might worsen a seductiveness of a greenback as a executive bank appears to be on march to broach another rate-hike in 2017, yet a uninformed comments might prominence a flourishing gainsay within a executive bank as Fed officials trim a longer-term foresee for a benchmark seductiveness rate.

Even yet Chair Janet Yellen and Co. embark on a some-more assertive proceed to normalize financial policy, executive bank officials might continue to plan a some-more shoal trail for a Fed Funds rate as ‘overall acceleration and a magnitude incompatible food and appetite prices have declined this year and are using next 2 percent.’ In turn, a FOMC might eventually strike a finish of a hiking-cycle forward of report as a cabinet struggles to grasp a 2% aim for cost growth.

Impact that the FOMC Minutes has had on EUR/USD during a last release

July 2017 Federal Open Market Committee (FOMC) Minutes

EUR/USD 10-Minute Chart


The Federal Open Market Committee (FOMC) Minutes advise Chair Janet Yellen and Co. will stay on march to broach 3 rate-hikes in 2017 as a executive bank reiterates that ‘economic conditions would develop in a demeanour that would aver light increases in a sovereign supports rate.’ The FOMC went onto contend that ‘the Committee should serve explain a time during that it approaching to start a module for shortening a bonds land in a light and predicted manner,’ yet executive bank officials seem to be in no rush to exercise aloft borrowing-costs as ‘members saw a near-term risks to a mercantile opinion as roughly balanced, but, in light of their regard about a new negligence in inflation, they concluded to continue to guard acceleration developments closely.’ The greenback mislaid belligerent following a discreet remarks, with EUR/USD bouncing behind from a 1.1730 segment to finish a day during 1.1766.

How To Trade This Event Risk(Video)

Bullish USD Trade: FOMC to Further Normalize Monetary Policy in 2018.

  • Need a red, five-minute candle successive to a matter to preference a brief EUR/USD position.
  • If a marketplace greeting favors a bullish dollar trade, sell EUR/USD with dual apart lots.
  • Set stop during a near-by pitch high/reasonable stretch from entry; demeanour for during slightest 1:1 risk-to-reward.
  • Move stop to breakeven on remaining position once initial aim is met, set reasonable limit.

Bearish USD Trade: Fed Officials Defend Lower Terminal Benchmark Interest Rate

  • Need a green, five-minute EUR/USD candle to cruise a prolonged EUR/USD position.
  • Implement a same proceed as a bullish dollar trade, only in reverse.

Potential Price Targets For The Release

EUR/USD Daily Chart

EUR/USD Daily Chart

Sign Up Join DailyFX Currency Analyst David Song to Discuss Key FX Themes Potential Trade Setups

  • EUR/USD might continue to retrace a decrease from a 2017-high (1.2092) as a span triggers a uninformed array of aloft highs lows after unwell to exam theAugust-low (1.1662).
  • Failure to mangle next a 1.1670 (50% retracement) hurdle brings a topside targets behind on a radar, with a tighten above a 1.1860 (161.8% expansion) segment lifting a risk for a pierce behind towards 1.1960 (38.2% retracement).
  • Keeping a tighten eye on a Relative Strength Index (RSI) as it works a approach behind towards trendline resistance, with a mangle of a bearish arrangement lifting a risk for a serve allege in a sell rate.
  • Interim Resistance: 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion)
  • Interim Support: 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion)

EUR/USD Retail Sentiment

EUR/USD Retail Sentiment

See how shifts in EUR/USD retail positioning are impacting trend- Click here to learn some-more about sentiment!

Retail merchant information shows 41.3% of traders are net-long EUR/USD with a ratio of traders brief to prolonged during 1.42 to 1.

In fact, traders have remained net-short given April 18 when EUR/USD traded nearby 1.07897; cost has changed 9.7% aloft given then. The series of traders net-long is 5.8% reduce than yesterday and 5.7% aloft from final week, while a series of traders net-short is 9.0% aloft than yesterday and 3.9% reduce from final week.

We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests EURUSD prices might continue to rise. Positioning is some-more net-short than yesterday yet reduction net-short from final week. The multiple of stream view and new changes gives us a serve churned EURUSD trade bias.

— Written by David Song, Currency Analyst

To hit David, e-mail dsong@dailyfx.com. Follow me on Twitter during @DavidJSong.

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