Today, the FOMC met and decided to hold the interest rate stable at 0.25%. As a result, the US dollar fell dramatically which caused pairs such as EUR/USD, GBP/USD, AUD/USD to rise rapidly. USD/CHF and USD/JPY plunged just as quickly. As I mentioned yesterday, some very vital data was due to be released today which could have had a massive impact on the market. This is exactly what happened and what a happy day it has been! Imagine gaining a bare minimum of 200 pips during the course of an hour…isn’t that amazing?
Look at this chart of EUR/USD:
That fantastic long range candle indicates that between 11am and 12pm PST, EUR/USD rose 300 pips! I got in about 15 mins after it started but I made a cool 100 pips in about 15-20 mins before exiting the trade. Didn’t want to be greedy, you could never be sure how long these trades will last, it had gone up so much already.
Isn’t it obvious that the proof is in the pudding? Economic data is so crucial in Forex trading. It’s not just about following the charts, we need to know what in going on in the countries’ economies, which is what we are trading in the first place. It’s not just know what it happening but knowing why it’s happening. I cannot stress enough how important it is to keep abreast of economic data every day.
Preview for tomorrow: An update on the progress of EUR/USD. Is it making a longterm trend to the upside?