With the US tax reform bill dragging on the markets are starting to feel a lot like ‘Groundhog Day’.
One day there’s a bit of positive buzz around the possibility of it getting through, followed by a day of negativity from possible delays. All in all it’s very draining and tiresome.
All we can do is focus on what’s in front of us and wait…… the good trades will pop up before you know it.
The U.S. currency had edged higher after Republicans on the House-Senate negotiating committee on Friday put the finishing touches on a sweeping tax overhaul that involves large cuts in levies on corporations.
But it slid on Monday on uncertainty that the bill would indeed be pushed through, and with some doubts also creeping in over the pro-growth effect the tax reforms would have.
Top Republicans are confident the U.S. Congress will pass the tax bill this week, with a Senate vote as early as Tuesday and President Donald Trump aiming to sign the bill by week’s end.
Despite the dollar’s latest dip, some analysts believe there is further room for it to go higher.
Economic forecasters expect lower corporate taxes to raise U.S. growth by roughly 0.5% over the next year, potentially lifting the pace of interest rate increases from the two priced in by the market to closer to the three consistently estimated by Federal Reserve policymakers.
The Euro & Sterling both benefited from the dollar’s weakness, whilst the AUD, NZD, YEN & CAD all traded sideways.
The majors are basically trading sideways within recent ranges. Euro and Sterling are trading withion large ranges whilst the rest of the majors have been pretty contained in tight ranges.
It’s shrugged off weak data to now sit at the top of recent ranges. I still like it lower but we are now waiting for the fundamentals to kick in with clear direction.
Check our detailed AUDUSD Analysis
I’m starting to think we’ll see the Kiwi higher as all negative data has been factored in. The key from here is the US tax bill.
Check our detailed NZDUSD Analysis
A lack of solid USD direction has it chopping about the place. I’m waiting for the final outcome of the US tax bill.
Check our detailed USDJPY Analysis
I like it lower overall but it’s trading the range really well as we await the US tax reform bill.
Check our detailed EURUSD Analysis
It continues to trade in a large range as Brexit and US tax reform continue to drag on.
Check our detailed GBPUSD Analysis
Continues to trade sideways, albeit in a large range, as we await the outcome of the US tax bill.
Check our detailed USDCHF Analysis
Continues to trade sideways as we await clarity on the USD. Oil has also stabilised around $57 and that too is having a sideways trading impact.
Check our detailed USDCAD Analysis
There’s not a lot on the books today except for some Housing numbers out of the US.
But this is where your attention to detail comes into play.
The NZ Business Outlook data is due and last month is came out -39.3%. This was huge variance from the forecast and led to a quick 40 point move to the downside in NZD.
So I’ll be watching that closely today and if we see a reversal in the data then we may have a good trade on.
Otherwise we’re basically in a ‘holding pattern’ as we await the outcome of the US tax bill.
It’s boring I know but it’s very important you remain patient.
There’s only a few bits and pieces scheduled today so don’t waste too much time in front of the screens.
With the US tax bill waiting in the balance the data may not even impact as traders wait for the ‘final outcome’.
You need to follow the economic data releases & best technical set ups to work out where the majority of action and interest will be.
**Technical Set Up: **Support 0.6980 & Resistance 0.7025
**Fundamental Driver: **NBNZ Business Outlook
**Potential Strategy: **I’m looking for a reversal in last months weak data. If it does correct then the topside is the trade.
Check our Next Best Trades list for full details.
Part 4: Where are you supposed enter the market? I’ll run you through the way the bankers read their charts.
In the fourth part of this 5 part series we look specifically at entry levels – Technical Analysis.
This is the most misinterpreted component of trading. Of course you can get in anywhere but how about reducing your risk and increasing the probability of success. That’s a good idea don’t you think?
That’s because most retail traders get their knowledge from ‘Google’ or from unregulated inexperienced goons hoaxing as ‘experts’!
Technical analysis is not about shoving as many Indicators on your charts that you can find….far from it.
It’s simple, methodical and extremely precise.
How do bankers trade forex - Webinar Series
**WHEN: **
USA – 7.00pm Wednesday 20th December
UK – 12.00am Thursday 21st December
AUST – 11.00am Thursday 21st December
The webinar will go for around 30 minutes – short and to the point!
Check the T4T Webinar calendar for more details or click on the link below to register. More information.
Register Now to Join the Webinar
The idea of our “Market Insight” is to give you some guidance into your daily preparation.
Make sure you don’t waste unnecessary time in front of the screens.
Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.
The key to your sucess: Isolate the opportunities that work for you and focus on them.
Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behaviour will take over).
Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!
Brad
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About the Author: Brad Gilbert
Brad has over 25 years of FX trading experience. Prior to setting up T4T in 2009, Brad worked for Citibank, Commonwealth Bank of Australia and Toronto Dominion Bank. He was Chief FX Dealer of some of the biggest FX teams in Sydney, London & New York. He has also worked extensively through Asia in Japan, Singapore, Hong Kong and Vietnam
The bottom line: Trading involves risk. Past performance is not indicative of future performance — nothing here is financial advice, and no outcome is guaranteed.
Written by Brad Gilbert, Founder & Head Trader at Traders4Traders — 36 years of institutional FX experience, mentoring 1,000+ traders since 2009.
The Game-Changer Trading System gives you the same tools the desk uses every day.
