Just providing a quick update on $EURUSD trades, for those participating in the small account challenge, as I'm getting a number of question on the thought process behind the trades.
Currently the state of play in the account is both swing trades have been closed out is at a profit.
I would consider taking a further short on a break of at 1.0850 or 1.0830, with the awareness that the next 24 hours will most likely get preety wild and woolly on the back of increased volatility around the Non-Farm payroll report.
The Fed Chair dropped some bombs yesterday on job growth and employment number making her strongest hints at raising rates in December.
The USD remains the strongest currency in the longer term as the market expects rate rises and they expect those soon late 2015 to early 2016 at the latest. The Fed has an inflation target of 2%; with current core CPI being 1.9%. Latest commentary from the fed and futures market pricing suggest that rate rises are a 60% chance for December. Resulting in a stronger $USD.
ECB are now playing up the "stabilisation" of the ECB zone economy, indicating they were now most concerned with shocks from outside the zone.
The also dropped a bomb stating that the "the degree of monetary policy accommodation will be examined in December" This is super shady in my book, as the markets will be particularly illiquid around the holidays. Laying the ground work for some massive volatility spike.
The Euro zone remains very weak in the short to medium term, quantitative easing is place and is expected to continue in the medium term. Lacklustre inflation and growth numbers show that QE still hasn’t started to take effect yet. QE will most likely be expanded at the December ECB meeting. Resulting in a weaker $EUR.
You can follow me at @fatbeetrader on twitter or sign up for future courses and events at http://www.fatbeetrader.com/sign-up.html
If you like the update and you would like more posts like this I'd really appreciated it if you left karma or comments below.
Most traders start with between $2,500 and $10,000 trading capital the small account is about growing a small account both in percentage and dollar terms.
Currently I'm using the challenge to test and evaluating Pepperstone as a broker and Ctrader as a platform. Regular trades will still be taken through FXCM.