Federal Reserve of the United States (Fed) kept rates on hold this past Wednesday and the FOMC (Federal Open Market Committee) statement was a bit confusing. The global risks acknowledgement was dropped from the statement so the initial reaction was a strengthening of the US dollar. The reason for that comes from the fact that such a chance implies the Fed is not worried anymore about the Chinese economy and it is ready to lift rates at next meeting. However, it turned out it was a fake move as US dollar sellers stepped in and sent the dollar lower again. The best pair to describe what happened at the release is the EURUSD pair as it made the daily high and low in five minutes after the release. Therefore, uncertainty was the name of the game and this was the case for the rest of the week as well.
Because of the Fed release, market was really calm and slow in the days prior to the release so any trading should have been done taking into account a bigger time frame for the expiration date. In our case, all trades were having end of week expiration date.
Better Than Expected GDP in Eurozone
Euro-area GDP (Gross Domestic Product) was released this Friday and it came better than expected, helping Euro bulls to become more daring. Not only that the GDP printed a better number, but unemployment rate fell too and now it is probably only a matter of time until we start seeing single digit numbers in the rate. These all were encouraging and made the EURUSD moving above 1.14 for quite some time and it is till interesting to see how Friday will end.
BOJ Stealing Thunder
Bank of Japan (BOJ) had its regular meeting this Thursday and the Japanese Yen pairs collapse at the announcement that there will be no other additional stimulus for the economy. As a result, the USDJPY for example collapsed to 18 months low and the other Yen pairs followed as well with severe drops all over the dashboard. There is nothing to compare with the Yen pairs falling because of the fact that the vast majority of traders were bulls and then if the move on the other direction is picking up steam, the stops are being triggered and market is falling really fast.
Oil Moved above $45
The other important event this week was related to the oil market as for the first time since November 2015 the $45 level was broken and oil enjoyed a nice bullish trend. Needless to say that the USDCAD pair moved lower all week until Friday (the GDP is not yet released) but even if the GDP in Canada is going to disappoint, this recover in oil will favor CAD bulls so any counter trend move after the GDP release should be faded.
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