Forex Trading Insights: Navigating Volatility Around Key Economic Reports 12-14-23

Volatility in Forex Market Due to Key Economic Reports

  1. Increased volatility due to PPI numbers, interest rate decision to keep rates unchanged 
  2. Drop in dollar as expected with unchanged rates 
  3. Target trade idea level not quite reached but close
  4. More bearish dollar news expected this week

Impact of Upcoming Economic Reports

  1. Retail sales numbers tomorrow expected to be bearish 
  2. Manufacturing and services PMI Friday also expected to be bearish 
  3. Bearish reports lead to drop in dollar and related currency pairs

Review of Current Trade Ideas

  1. Trade idea came down close to target support area as expected 
  2. UJ found support at 142.500 target
  3. GU hit profit target area around 126
  4. EUR/USD hit target above 108
  5. AUD/USD hit 66 target and continuing up
  6. NZD/USD hit weekly open target and continuing up toward 62.5

Outlook and Strategy

  1. Bearish dollar outlook with upcoming reports 
  2. Expect related pairs to follow through if reports bearish 
  3. Key support and resistance areas to monitor
  4. Taking positions based on dollar direction

Today was a day that had a lot of enhanced volatility as a result of the not only the PPI numbers coming out, but also the interest rate decision and the decision to continue to keep the rate at 5.5%. As a result, we did get a drop in the dollar which was what was expected if that would be the result. If we decided to keep that rate at 5.5.

With that drop, we were expecting for the trade idea to make it down here to this next quarter level, make it back down here to this one 2500 level. It didn’t quite make it down to the 102 500 level, but it did make it down to the 100 and 275 area. We do have more bearish news coming in for the dollar.

Well that is expected this week for the dollar. And if that bearish news does indeed come out in the same way that it is expected, then we can expect for the dollar to continue to trend down to that 102 500 area which is the major quarter area below where price was when we started. This week off we have retail sales coming in tomorrow at 830, which is December the 14th.

And with retail sales numbers those numbers are expected to be bearish as far as those month over month numbers. And on Friday we have the S and P global manufacturing PMI numbers and services PMI numbers coming in and both of those reports are expected to be bearish as well as both of those numbers are trending down instead of up in the way that we need them to. And with that being said, we did have as far as for our us led pairs, we did have those drop today.

So this one came down to the wild card area which is exactly what it is that we expected. Now afterwards it is kind of breaking through there, but this is where we’re expecting the bounce to take place.

Also for the UJ idea, again 142 500.

That is the area that this one has found support.

And then for our us paired currencies, we have for the GU again made it to our profit area of 126 and made it past and beyond.

We have for the EU. This one made it up through so we said that it needed make it above 108 and it did make it above 108 as far as 108 and then hold and then it did that.

So our expectation is for it to make it to 109. It has not yet made it to 109 yet.

For the AU idea, this was one that we were expecting to make it back to 66.

And so again for this idea making it to 66, this one did indeed push up to last week’s open. So this is last week’s opening price right here. It pushed up here and then now it’s pushing up even further.

The next location past this one, as far as when we talked about this earlier today, was the 67 mark. It has now shot past the 67 mark and it’s pulling back slightly below the67 mark. So 67 was our next area that we were watching.

And last but not least for the NU idea, this was one that we were looking for, capturing its weekly open because it had been battling there for so long. And then after capturing its weekly open to make it back up here to 62 cent. So it has made it up here to 62 cent and it made it back up here as far as to last week’s open.

And so with making it back up here now, it is seeing some signs of resistance. But the next area that we’re looking for this one to make it to, especially if those reports do come in bearish for the dollar, will be this 6500 area. So I’m making it to 62 and a half up here.

So that’s what we’re looking at for our trade ideas. Again, some very nice movement that we’re getting with the dollar. So again, the dollar moves up, the dollar movies down.

We take the trade ideas that we take based upon the dollar’s movement. So that’s what we have. Again, we have bearish news being more bearish news and expectations coming out tomorrow and also those expectations coming in on Friday as well.

And so if both of those do come in bearish as they are expected to, then we can expect the follow through on all of these trade ideas being paired with and paired up against the US dollar.

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