EURUSD is moving down big time. Why?

Trading Discussion Currencies
1

I know the fed statement was today. But it went as expected if I’m following right (or maybe it didn’t??). Is what’s been going on the last 2 hours what was expected, even before the statement, or is the statement affecting the markets more than expected?

I thought this stuff was priced in?

I’m confused.

2

Not all news is fully priced in before it emerges. At least not always. But you will just drive yourself crazy trying to second-guess news and market reactions.

I trade long-term according to strict but simple rules to define entry. these take no account of fundamentals or news and I ignore interest rate announcements like today plus NFPR’s etc. I suppose I would be flat around US election day, UK general elections, Brexit referendums, that kind of thing.

But most of the time nobody alive could look at an unlabelled daily chart and say this was the NFPR day, this was a Fed announcement day, this reversal was due to X or Y.

In general, bad news comes out in downtrends, good news comes out in uptrends. Reversals on routine news are not common.

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3

The actual data was on point and for the most part priced in.

But the comments made by Fed. Chair Powell in the speech afterward didn’t go down well with the markets. Ask me how I know!!! LOL!!!

4

the reason it went down:

it was anticipated that the FED will be cutting rates at least 1 more time this year.

powell made it subtly clear that there wont be any cuts anymore unless they are really really needed.

the cut of toay was already priced in for weeks. the prospect of future cuts was also priced in by at about 20-40% chance.

now that there wont be any more cuts this year, USD strengthened compared to all other currencies traded against the USD (cuts make currencies weak, hikes strong)

it was a reevaluation of the future perspectives of the USD that made the EUR/USD fall.

logically it should have rallied (on a FED rate cut) but the rally was already in the price.

damn, i find it funny how i dont trade FOREX at all, never did, never will… and still can explain everything better than those FOREX gurus here.

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5

Thanks gents for the explanation. The priced in and not priced in, gotcha.

I think I’ll stay away during the big news events . You guys rock. Thanks again.

6

I suggest you read this breaking news:

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