USD Under Pressure On FED-Day
Shain Vernier • 1 min read
The Greenback is on the ropes to open May, fading across the majors. Significant losses against the Swiss franc, Euro, and British pound have highlighted the pre-FED U.S. session. At this point, it appears currency players are happy betting on an exceedingly dovish FED Interest Rate Decision and presser later today.
Earlier, a weaker-than-expected group of numbers turned up the heat on the USD. The ISM Manufacturing PMI (April) disappointed expectations (55.0), coming in at 52.8. In addition, Construction Spending (MoM, March) contracted by -0.9%, further driving uncertainty to the U.S. real estate market.
It is early, but today may shape up to be an exceptionally rough go for the Greenback.
In a Live Market Update from Tuesday, I outlined a short trading plan for the USD/JPY. The trade is now live and testing a key daily 78% Fibonacci Retracement area.
As far as the USD/JPY goes, the 111.18 area is a big one. In the event it gives way, a test of the daily Swing Low (110.84) will become probable by today’s closing bell.
Overview: FED trading sessions are often a challenge to trade. Whipsaw conditions are the norm, as the markets predict and then react to FED policy. While the USD may look weak now, things can change very quickly. If you are holding open positions in the majors, keep a close eye on price action as sudden reversals are certainly possible.