Learn How To Trade – Trapped Traders® Daily Analysis – Trading FOMC

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And obviously as price has gone up strongly through this level, it’s triggered those stops, but also what it’s done is it’s tempted in the traders who were trading the level as a level of resistance. So, let’s just take a look at that. I’m just going to change the color of this. So, as it sold off, people went short. Not so many did that because obviously this is a strong move. This is more profit taking than a potential area of resistance. It’s when it comes up that second time that the resistance is confirmed, and then the third time the resistance is confirmed.

But what it didn’t do is it didn’t follow through. You’ll notice it just sort of attempted to, but never carried on above the 200-period moving average. And the traders who went short in here got absolutely creamed on that massive engulfing candle. So, there’s a lot of demand in there. Now, favor the upside in this pair. The data for the USD has definitely shifted as of late, but of course tonight we’ve got FOMC and I would be staggered if that’s going to be positive given how the data has been soft recently and how the USD has been getting kicked all over. But you never know.

So, there’s two ways to play this, is if this is what I’ve sort of anticipated it will be. Softness to continue in the tone from the fed. It’s going to continue the softness in the USD. Then I think this isn’t going to be a stop hunt. I think this is going to be a continuation higher. And those traders who were trapped in there, if it does come into this area before the fed statement, then this looks decent to get long because obviously you’ve got that demand in there. The reason why it shot up in the first place. Massive engulfing candle. It trapped those traders selling off that level because they thought it was going to go down.

And if they’ve been caught, if they cancel their stops because not everybody would’ve been stopped out. If they cancel their stops, obviously they’re holding those losing positions. They’re off siding those losing positions and should it come down into the level there, then you might want to look to buy that. The reality is though this is a daily chart, so we’re probably not going to see that to be fair before the end of play. So, this could be a stop hunt though.

So, if this is positive USD, then this could’ve been a giant stop hunt, stopping all those resistance traders out, and you’re going to see a big sell off. And down to that 200-day simple moving average wouldn’t be a terrible place to look to take some profit. Obviously you’re going to have a little bit of trouble in here, but you would imagine if that’s a stop hunt, prices would continue lower. So, a couple of ways to play it. I favor the upside to be honest, but as with all of these risk events you never know, so wait and see how it plays out. And even if you don’t perhaps get the opportunity today, you can obviously look at that level to trade it in the coming days.

This video is for general information only and is not intended to provide trading or investment advice or personal recommendations. Any information relating to past performance of an investment does not necessarily guarantee future performance. Forex Traders Daily including its analysts shall not be responsible for any loss that you incur, either directly or indirectly, arising from any investment based on any information in this video. Please remember derivatives and FX spot carries significant risks and may not be suitable for all investors. Losses can exceed your deposits.


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