When and how would you consider profiting from tomorrow's volatility? What time frame would you use and why?
Personally, I look for technical setups on daily charts caused by central banks/members announcements (interest rates/inflation/Q.E) and place trades, retrospectively, just before the London Open (around 06:00 UTC) if market sentiment, fundamentals and technical setups all point the same way.
GBPUSD - Market Sentiment, Fundamentals and Technical Setups
Market Sentiment
USA
Larry Summers has pulled out of the race to replace current Fed Chairman, Ben Bernanke, in January 2014. Therefore, the chances of current Fed vice Chairwoman, Janet Yellen, succeeding Bernanke have greatly increased. Yellen is perceived to be more dovish than Summers, leading the market to believe a loose monetary policy will continue into her tenure, should she be elected.
The market is waiting with bated breath to see whether the Fed will announce a tapering of its monthly asset purchase program on Wednesday. Analysts are expecting a reduction of $5 to $15 Billion per month. However, this may now be less likely to happen any time soon with the more hawkish Summers out of the running to become chairman.
UK
Mark Carney will be under pressure to reassure investors that the latest positive UK economic data will not affect his ‘forward guidance’ time horizon. Although recent data has been good, it would be suicide to even consider raising rates until 2016 IMHO.
Fundamentals
Wednesday, 18th Sep 2013
08:30 UTC: MPC Bank Rate and Asset Purchase Facility Votes
18:00 UTC: FOMC Statement and Economic Projections
18:30 UTC: FOMC Press Conference
Technical Setups
Cable is at an 8-month high, so bearish momentum caused by Carney reiterating a prolonged period of low interest rates, and the possibility of the Fed tapering could lead to a GBPUSD D1 reversal in the short term. Now we just need to play the waiting game...
Personally, I look for technical setups on daily charts caused by central banks/members announcements (interest rates/inflation/Q.E) and place trades, retrospectively, just before the London Open (around 06:00 UTC) if market sentiment, fundamentals and technical setups all point the same way.
GBPUSD - Market Sentiment, Fundamentals and Technical Setups
Market Sentiment
USA
Larry Summers has pulled out of the race to replace current Fed Chairman, Ben Bernanke, in January 2014. Therefore, the chances of current Fed vice Chairwoman, Janet Yellen, succeeding Bernanke have greatly increased. Yellen is perceived to be more dovish than Summers, leading the market to believe a loose monetary policy will continue into her tenure, should she be elected.
The market is waiting with bated breath to see whether the Fed will announce a tapering of its monthly asset purchase program on Wednesday. Analysts are expecting a reduction of $5 to $15 Billion per month. However, this may now be less likely to happen any time soon with the more hawkish Summers out of the running to become chairman.
UK
Mark Carney will be under pressure to reassure investors that the latest positive UK economic data will not affect his ‘forward guidance’ time horizon. Although recent data has been good, it would be suicide to even consider raising rates until 2016 IMHO.
Fundamentals
Wednesday, 18th Sep 2013
08:30 UTC: MPC Bank Rate and Asset Purchase Facility Votes
18:00 UTC: FOMC Statement and Economic Projections
18:30 UTC: FOMC Press Conference
Technical Setups
Cable is at an 8-month high, so bearish momentum caused by Carney reiterating a prolonged period of low interest rates, and the possibility of the Fed tapering could lead to a GBPUSD D1 reversal in the short term. Now we just need to play the waiting game...
Most people have the will to win, few have the will to prepare to win
