Yellen Rambles Dollar Scrambles

I’ve earned myself a few hours reprieve of playing Valencia tour guide and may even be able to hit the gym to work off a few of those greasy restaurant food calories. But it seems you guys were in dire need of a comment cleaner, so here’s a quick USD update after yesterday’s big central bank triathlon.

Judging by the Dollar’s tepid bounce I don’t seem to be alone in having been left a bit confused by chairwoman Yellen’s ramblings. What on the surface appeared to have been the FMOC’s declaration to finally terminate its decade long campaign of quantitative easing for the foreseeable future has however left many questions unanswered. For one the lingo used suggests that the Fed is now switching to a more hawkish stance, but it never misses an opportunity to sneak in its default disclaimer of possible negative surprises in the months ahead. Which pretty much can mean anything or may mean nothing based on who’s is in rotation to vote at the FOMC and who will eventually be chosen to take over for Mrs. Yellen sometime next year.

At any rate, what the market seems to be accepting as fact at the current time is the probability of a rate hike this December, which most likely is the one reason why the greenback has not fallen off the plate just yet. The formation on the monthly panel does support a bounce here followed by a short squeeze. But there seems to be very little bullish sentiment ready to actually kick things into gear. so I’m cautiously optimistic but would not put it past large currency vigilantes to take advantage of the current state of confusion and shake out a few more longs here.

Not surprisingly our USD/CAD campaign is in pretty good shape now but as you can see I for one was merely ticks away from being stopped out in all the confusion yesterday. My stop remains at break/even as this is one of the most promising looking USD campaigns right now and if there is a medium term future for the Dollar then I intend to ride it all the way.

The EUR/USD campaign of course has met its maker at about 1R in profits. Not bad for a pre-FOMC announcement trade and I won’t complain – money in the bank and bills always need to get paid.

The ZB is on my watch list and if I wasn’t busy playing tour guide this week I may have risked a small entry here. However it’s probably best to wait until next week in hopes of a more pronounced retest of the 100-day SMA.

One more goodie for my intrepid subs:

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Alright, that’s it for me – see y’all next week!