In case you haven’t noticed – commodity currencies are strong across the board this morning. The Kiwi , Loonie as well the Aussie all making reasonable moves upward against nearly everything under the sun.
Generally associated with “risk” I do find it interesting that these currencies are exhibiting relative strength a short 24 hours ahead of the Fed’s Announcement. Further “blurring” the markets expectations of a “modest taper”, a “super taper” ( highly unlikely ) or no taper at all , seeing these currencies on the move could be perceived a couple of ways.
- Ramp job into tomorrow’s announcement ( with consideration/expectation of “selling at higher levels”) and selling the news.
- Heightened expectations that “everything is gonna be just fine” and money flowing into these currencies early.
Unfortunately it requires “speculation” as to which way things are gonna go tomorrow as the market isn’t “giving it away” that easily. Low volume is also a contributing factor as price moves are exaggerated.
The Kiwi in particular is on a real tear this morning but “just now” bumping into its resistance zone.
I’ve stopped out on a couple of scalps from the night prior, as I’ve no intention of holding anything “for fun” under the current market conditions. JPY longs are a long-term hold regardless, and I’m out of all USD related pairs, more or less 85% cash – looking for entry after Wednesday’s announcement.