The Federal Reserve will publish its semi-annual monetary policy report to Congress today. With Chairman Jerome Powell scheduled to deliver his semi-annual testimony to Congress next Wednesday, market participants will scrutinize the report for clues about the Fed’s medium-term policy outlook. We expect the report to largely echo the tone of this week’s FOMC minutes: a more upbeat view on the economy, more confidence to reach the 2% inflation target, and more rate hikes – but the normalization will still go on at a gradual pace.
Canada's inflation report is scheduled for today.
This is how our forex trading strategies look:
Trading strategy: Short
Open: 1.2300
Target: 1.2180
Stop-loss: 1.2360
Recommended size: 2.73 mini lots per $10,000 in your account
Short analysis: The EUR/USD bias remains on the downside. The scope is for losses to the 30-day lower Bollinger® band, currently at 1.2175. This is near to the major Fibo, 1.2173, 38.2% retrace of the November-February rise. 14-day momentum is slightly negative, reinforcing the overall bearish market structure.
Previous position: Long opened at 1.2220, profit taken at 1.2380, earned: 160 pips, $320 per $10,000 in your account
Trading strategy: Await signal
Open: -
Target: -
Stop-loss: -
Recommended size: -
Short analysis: We see downside risk for the GBP/USD, as the pair is back below 50% retrace of January rally. Recent lows at 1.3801 and 1.3764 are the nearest support levels.
Previous position: Long opened at 1.3780. Profit taken at 1.3980, earned: 200 pips, $272 per $10,000 in your account
USD/JPY
Trading strategy: Short
Open: 107.80
Target: 104.80
Stop-loss: lowered to 107.40
Recommended size: 1.43 mini lots per $10,000 in your account
Short analysis: Bulls were halted by the 108.01 Fibo, 50% retrace of the 110.47-105.56 fall, which has kept the underlying focus on the downside. 14-day momentum remains negative, meaning the underlying risk is skewed to the downside. We remain short at 107.80 for losses down to 104.80. Profit locked in at 107.40.
Previous position: Short opened at 110.00. Profit taken at 107.50, earned: 250 pips, $304 per $10,000 in your account
USD/CAD
Trading strategy: Await signal
Open: -
Target: -
Stop-loss: -
Recommended size: -
Short analysis: The CAD weakened to a two-month low against the USD on Thursday after a surprise drop in domestic retail sales. That followed recent data showing manufacturing sales and wholesale trade also dropped in December. Latest data support expectations for the Bank of Canada to leave interest rates on hold next month. Canada's inflation report for January is due on Friday.
Previous position: Short opened at 1.2650. Profit taken at 1.2600, earned: 50 pips, $67 per $10,000 in your account
AUD/USD
Trading strategy: Short
Open: 0.7845
Target: 0.7740
Stop-loss: 0.7895
Recommended size: 3.00 mini lots per $10,000 in your account
Short analysis: Slide from February's high extends. The pair pierced 10-day SMA and RSIs are biased down, so we might have to deal with depper correction. We've got short at 0.7845 today, our target is 0.7740.
Previous position: Long opened at 0.7785. Profit taken at 0.7800, earned: 15 pips, $24 per $10,000 in your account
EUR/GBP
Trading strategy: Await signal
Open: -
Target: -
Stop-loss: -
Recommended size: -
Short analysis: The EUR/GBP pierced the 0.8800 support level today, which opens up a run back to the 0.8733 significant low from February 8. We will wait to see how the charts end the week before setting a new strategy.
Previous position: Long opened at 0.8865. Stop-loss hit 0.8800, lost: 65 pips, -$100 pips per $10,000 in your account
Source: MyFXspot.com