Post FOMC - Trade Analysis

Yesterday's FOMC meeting was nothing short of a celebrity news. Its surprising how some finance portals put their headlines as 'shocking' which is indeed surprising. Are their analysts too smart with their Phd Degrees that they are out of tune with what's actually happening or are they paid to give out false information? A case in point being Barclays which went on to justify why the fed would taper (Read: Trading the 4 Components of Sep. FOMC). Either there's something that i'm missing or perhaps that is the job of 'Sold-Out' economists/analysts who get fat bonuses based on how much of wrong info they give out.

Anyways, moving back to our analysis, yesterday I noticed the Dollar Index, 12 hour chart forming a Wolfe Wave pattern as well. It is bullish in the long term and currently dropping lower to make the wave 5. Needless to say, this basically puts the Dollar index inversely co-related to the EURUSD.

Later today we will see the initial unemployment claims being posted. Bear in mind that last week's better than expected headline reading was skewed on account of under-reporting from some states. So expect a downward revision. Markets should not be reacting adversely but given the insanity, who knows.

Below is the USDX chart, with price now in the 'sweet zone' A reversal could happen but at least not immediately.

Dollar index - Wolfe Wave Pattern, 12H Chart

EURUSD - It might seem like a missed opportunity but it pays to have patience. Euro has also crossed into the 'sweet zone' with upside targets in the region of 1.37 We will have to wait and see how price plays out here. This weekend, Germany, Europe's behemoth will be heading into elections. A Pro-Merkel victory would see the ECB heaving a sigh of relief. But it could be crisis time should the opposite happen. Given the above fundamental view, sitting on the sidelines is the best bet for now.

EURUSD - Wolfe Wave, Price in Sweet Zone

USDJPY - This pair has triggered a sell and our stops reside at 100.59. The first target is going to be 95.95 followed by the final target of 90.7.

USDJPY - Wolfe Wave, in Play

It would be best to book some profits around the first target, move the trade to break even and some pips (to at least cover the negative swaps and/or commissions) and sit back and watch.

Note: I will update the trades on Goldman Sachs and Staples later today. Both of which are shaping up nicely.