Wednesday, August 19, 2015

Spikes both directions in eurusd when US data is released



News releases often create sharp volatility. Today was no exception. When US CPI came out eur/usd price initially spiked high above European session high and then quickly went down below yesterday’s low and quickly bounced of it too. As I wrote in my previous post, I closed my short position a few minutes before the release at 1.1040 level (20 pips of profit) in order to avoid such volatility as I have already described and as you may see from the chart below.

One thing is clear: nothing is clear. Choppy price action may also mean that “All EYES ARE ON FED”. Despite some bullish price action at the lows today you cannot really say whether price is going up or down. Tiny longs may be attempted at this level with stop losses some thirty pips below the low of the day (1.0975 level). If price spikes up after FED minutes release and forms a reversal pattern we may attempt a short with a target below today’s lows (at around even number of 1.1000). 

Although we have plenty of time till the release it is better to wait out rather than to put your head under the ax of FED. They can create even bigger volatility. 

2 spikes in eur/usd

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