Alpesh Patel's NEWSLETTERPRO – Dollar extends recent gains on a nearly optimistic FOMC statement, Euro and Cable reach for our targets at lower levels

Share On Facebook
share on Linkedin


Yesterday was another good day for the US Dollar as investors kept adding to their Dollar-long positions. The Federal Reserve’s statement that came along with the Rate Decision announcement was the trigger that led investors towards favoring the American currency as the tone that came out of the statement wasn’t nearly as pessimistic as market participants were expecting. According to the FOMC statement, the Fed is not worried about the recent decline in the job market and their concern over fiscal conditions is limited. More importantly, the committee didn’t make a specific reference to pushing tapering into 2014, leaving a window open for a reduction in asset purchases with 2013. We are confident that the chance of tapering within this year is slim to none but their mere reference that they will “continue monitoring incoming data and adjust the level of asset purchases as needed” was enough to spur a rally in US Dollar. In other currencies, both the Euro and the Cable were hurt by the demand for Dollars and extended their losses. The European currency seems to be forming a reversal formation as the pair seems to have formed a near-term peak at the 1.3800 mark. The Cable on the other hand fell aggressively for a second day and threatens to break below the 1.6000 level. This confirms our views over the recent reports that the British currency has stalled its previous uptrend and is now retracing lower, should the pro-Dollar rally continue then the Pound could make a move for the 1.5900 support.

German Retail Sales and Euro-zone CPI threaten to send Euro lower

Early this morning the Single currency is at risk as the German Retail Sales figures are expected at 7.00am UK time and a possible surprise to the downside here might be enough to send the Euro tumbling lower. A couple of hours later, the Euro-zone Consumer Price Index is another piece of data that we would want to keep an eye on to better assess how the consumer market is fairing in Europe. Lastly, over the US session the Initial Jobless Claims is the only event that requires our attention and we will want to note down yet another clue on how the recovery in the job market in the US is progressing.

Economic Calendar









German Retail Sales






Euro-Zone Unemployment Rate






Euro-Zone CPI






Initial Jobless Claims





This is the free, time-delayed version of NewsletterPro, a subscription-based product.

If you would like to receive it before 7:30am, please subscribe by clicking here.



Euro continued its decline yesterday and reached our first target at the 1.3690 area just a couple hours ago over the late Asian session. We need to close 50% of our trade there and move the stop on the rest of our trade at the breakeven price. Actually, we would want to place our stop just a few pips above the breakeven price, preferably at the 1.3745 level as a pullback is possible here. There are key events over the day that could send the Euro either way but we are happily placed in a position where we are targeting further on the downside towards our second target at 1.3600 while a possible retracement higher could only close us out at the breakeven price without any losses.


The Pound retraced a bit yesterday before falling again and testing the 1.6000 mark and ended settling down near that level. The currency seems to have found some support at the 1.6000 barrier but we think that should the pro-Dollar rally continue the British currency will reach for lower levels and ultimately test the 1.5900 area. For today, we will move our stops a bit further down to lock-in additional profits in case the Pound retraces higher. We will place our stops at the 1.6085 price tag and wait for the currency to clear the 1.6000 barrier as it reaches for lower levels pushed by the recent demand for Dollars.

FTSE 100

The FTSE 100 reached our second target at the 6,820 points area yesterday before retracing lower for the rest of the day. Now that the UK index has completed its retracement lower we would want to rejoin the uptrend should it continue. We want to enter long just above the recent 6,820 peak and target the 6,865 and 6,938 points levels with a stop placed below the 6,740 area. The UK index has been kind to us and offered us consistent profits on its recent uptrend and we would want to see if there’s any gas left in the tank to move even higher.


Gold lost ground over yesterday’s session and closed the day near the $1,336 level battling the 200-hr EMA. As we mentioned yesterday, we would like to stand aside from the yellow metal at this time and only enter a trade below the $1,328 level. Should this level be broken downwards then a short trade will be taken with targets at the $1,310 and $1,278 marks and a stop above the $1,363 area. However, we feel that for today Gold will remain range-bound but we’re also prepared for the possibility that a potential catalyst spurs a rally towards lower levels.

All charts have been created using FXCM’s Trading Station platform.

This is the free, time-delayed version of NewsletterPro, a subscription-based product.

If you would like to receive it before 7:30am, please subscribe by clicking here.



Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch:

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20220128 02:12:20