The hangover continues this morning
Skerdian Meta • 1 min read
Goodmorning to all our followers and we wish you a successful trading week from the entire fxmarketleaders team. Last Friday was a game changer in the forex market, at least in the short term. The head of the FED Yellen dropped half a decent hawkish comment at the Jackson Hole summit and the forex market went haywire, with the USD starting to reverse the downtrend of the recent few weeks.
It didn´t happen right away as the market needed some time to digest it, but once it started there was no going back. The Buck ended that day about 100 pips up against most major forex currencies. It was a day filled full of action and it seems like this morning the price action is following in the footsteps of Friday. The move is slow, but the market is convinced the USD is the currency to buy at the moment.
The funny thing is that Yellen didn´t even promise any action or indicate a Septembers interest rate hike. She remained in her shell for most of the speech and was forced to comment on the monetary policy path only once. She said that the case for tightening the monetary policy has strengthened, but even that comment doesn´t mean the FED will hike tomorrow or in September.
In fact, the odds of a September rate hike have declined after the speech. Yet, the forex market sentiment turned around 180 degrees. This is a perfect example of how the market makes its mind up all by itselt, disregarding all other issues it was worrying about just a minute ago.