In line with expectations, the Federal Reserve raised the target range for the fed funds rate by 25 bp to 1.25% – 1.50%. The post-meeting statement highlighted a strengthened economic outlook and the Committee’s increased confidence to hit the inflation target before the end of this year.
Along the same lines, the update Summary of Economic Projections showed stronger growth forecast for 2018 and 2019 (reflecting the impact of the fiscal stimulus), a lower path for the jobless rate, and the anticipation that core inflation will exceed 2% next year.
This is how we trade today:
EUR/USD
Trading strategy: Long
Open: 1.2330
Target: 1.2550
Stop-loss: 1.2245
Recommended size: 2.11 mini lots per $10,000 in your account
Short analysis: The pair climbs back above the daily cloud top as well as the 10, 21 & 55-Day SMAs. RSIs are biased up again and give us bullish momentum. We opened EUR/USD long at 1.2340 for 1.2550.
GBP/USD
Trading strategy: Long
Open: 1.4085
Target: 1.4300
Stop-loss: 1.3985
Recommended size: 2.00 mini lots per $10,000 in your account
Short analysis: The GBP/USD bulls have broken the 30-day upper bollinger-band, (1.4088), which encouraged us to open a long position. Fourteen-day momentum remains positive, the target is 1.4300.
USD/JPY
Trading strategy: Short
Open: 106.00
Target: 1004.00
Stop-loss: 107.00
Recommended size: 2.12 mini lots per $10,000 in your account
Short analysis: The falling kijun line, currently at 106.58, has capped USD/JPY for now. The downtrend from January remains intact. We opened short at 106.00. The new target is 104.00.
USD/CAD
Trading strategy: Short
Open: 1.2900
Target: 1.2600
Stop-loss: 1.3050
Recommended size: 1.72 mini lots per $10,000 in your account
Short analysis: The USD/CAD broke below short-term moving averages, which is an important bearish signal. We expect a further downward move in the coming days. Short for 1.2600.
