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A New Opportunity To Buy The Usd On The FOMC Minutes?

|Includes: CurrencyShares Euro Trust ETF (FXE), UDN, UUP

On Tuesday and Wednesday, the macroeconomic calendar is packed with a long list of news releases, but in reality just a few of them really matter and have the strength to influence the market.

By a large distance, Tuesday’s FOMC minutes will be the most important. If the Fed sees again evidence that growth in the U.S. economy has slow down, a panic sell-off will probably hit the market. Chances for this outlook are quite high, considering the recent news releases.

The S&P 500 futures index recently bounced off the 1035.00 support area. This level has been holding the market during the prior week, but bearish FOMC minutes have the potential to turn this key support level into a strong resistance.

The outlook of the currency market isn’t that great either. The market had been constantly driven by risk-aversion over the last few weeks of trading, something that has lifted the overnight volatility. This is good for options buyers, but it is very bad for novice traders, which simply see their accounts being whipped due to strong moves out of nowhere.

Some traders might have noticed this, but the daily charts of the major pairs look very identical. Mainly, we are referring to the fact that all the major pairs are currently consolidating near the low touched during the prior week of trading. team reckons that a sell-off in the S&P 500 futures index following the FOMC minutes will have negative implications for the currency market as well. The team tends to favor Long Usd and Jpy plays these days, and this was clearly seen in the trading signals that we sent out recently.

Disclosure: No position