Forex Trading Room - Powell Insists on Lower Rates + GBPJPY Trade

In today’s live trading session, we went over Powell’s speech as well as our predictions for the US Dollar moving forward. We then found swing trades for GBPJPY and EURNZD.

This morning Fed Jerome Powell spoke about his plans for the monetary policy. He suggested that rates should remain low to facilitate a staggering economy that has been brought on by the pandemic. He suggests that the Central Bank will allow inflation to go higher than the gold standard of 2% before hiking interest rates. As we know, moderate levels of inflation are needed to fuel an economy. The reaction to Powell’s news led to a bullish result for the US Dollar, with the DXY going up 70 points.

For the rest of the session, we identified possible trade setups to take in light of Powell’s comments. For the most part, many of the majors have conflicting price action due to today’s events, so we elected to shift our focus on the minors. One setup we found was a swing long for GBPJPY. We will be entering this trade once we get confirmation from the next 4hr candle. We then found a swing short for EURNZD, which requires a daily closure below last week’s low to warrant entry.

A slow week, but we are in profit and we haven’t lost a trade yet. That is what trading is about, taking what the market gives you, and walking away. Remember, the markets do not owe us anything. The Jackson Hole Symposium will run from today until the end of tomorrow. We expect the markets to be buzzing with volatility during this time. As always, be safe and trade responsibly!