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1.0 Introduction

GBP has depreciated in the 7 months up to February substantially. This was most conspicuous on the GBP/JPY pair which
was down by over 20% and GBP/USD pair which has dropped by over 12% and reached a 7 year low at 1.3835. Afterwards
the GBP has bounced back up to around 161 and 1.44 and is currently trading at around 159 and 1.41 respectively.
The two main factors determining it’s further trend direction for the upcoming months will be the potential Bank of England’s interest rate decision as well as the referendum taking place on June 23rd and being decisive on whether United Kingdom will stay or leave the EU.
1.1 EU Referendum
The Fitch Ratings agency has issued a report stating that Brexit would “drive short-term disruption and long-term risks” and that the “precise impact would be highly uncertain”.The referendum factor is solely political and unpredictable, although BoE Governor Mark Carney has reassured that additional liquidity will be provided to the banking sector before and after the referendum in order to avoid any potential insolvency problems. However, as the campaign unveils we will probably see many turnarounds in polls and predictions and this wil…
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Daytrader21 avatar

Good job!!

WallStreet6 avatar

Thanks!

Goodini avatar
Goodini 1 Apr.

good article

driven avatar
driven 2 Apr.

Interesting article. Well done!

Kivetat avatar
Kivetat 19 Apr.

Very good job)))) Thank u for this informative and interesting article))))

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INTRODUCTION
The FOMC Statement is a highly anticipated event, more so as the FED is nearing it's planned interest rate hike.
A lot of care is put into the exact wording used in the statement, so as not to cause excess volatility in the markets, or misleading information.
Trading this risk event is like playing a game of Poker with the FED, carefully analyzing every word trying to interpret the underlying message. Essentially trying to figure out the FED's cards, to determine when to go all in!
(figuratively speaking).
SUMMARY

This article is my personal interpretation of the FED Statement of Dec. Therefore the view here may differ from other publications on the web, as the statement does carry a larger degree of vagueness.
The objective of the article, is to provide trader's that are new to the fundamental side of trading, a view of how a press conference can be interpreted, and subsequently trade the obtained information.
Figure 1 - USDJPY 5M - Showing a bullish effect prior to, during and post FOMC
To sum up the statement in one sentence, the FED see's the economy continue to improve. Everything remains inline to raise interest rates as planned. This will likely occur mid
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Daytrader21 avatar

Nice Article. This FOMC statement was indeed quite confusing at first because they where reporting the "considerable time" stance was dropped off and than they came back reporting the "considerable time" is still there used in another paragraph.

alifari avatar
alifari 30 Dec.

A well written article, well done

Jignesh avatar
Jignesh 1 Jan.

Thanks alifariDaytrader21 I think what made it even more confusing was Yellen's hawkishness in the press conference! but that is why I decided to write the article.  Hopefully provide a bit of perspective on my take.

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