Daily Market Analysis March 19th, 2015

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Market AnalysisGood morning traders,

In conclusion to their March policy meeting the Federal Reserve’s Open Market Committee going into the second quarter, sure have given traders a lot to think about. Yellen did revoke the word ‘patient’ from their terminology during the meeting, however, it looks as though the rate hike can still take a back seat. The Central Banks agreed to revise and lower its forecast for the Gross Domestic Product (GDP), unemployment and the core PCE inflation for each year till 2017. Another revision was of the Non-Accelerating Inflation Rate of Unemployment to 5.0-5.2% implying there is less urgency to raise rates in the unemployment sector that is still well above the level.

I was awaiting any comments from the Fed with regards to the strength of the USD, they were pretty much mum on this subject however they did mention that they would assist with international developments.

The results were that during the meeting all majors were trading slightly higher in the wake of the FOMC’s statement. The EUR / USD rallied around 150 pips up and through 1.07 to test the 1.08 level that was much needed. The GBP / USD saw a recovery and reached its previous support zone between 1.48 and then one up from that to 1.49. The USD / JPY dropped from its 7.5 year all-time high from 121.80 back to 120.00. During all of this the US equities reached new heights with DJIA and S&P 500 now trading up another 1% and US 10 year bond yields dropped to below 2.0% to 1.98% immediately after the statement was released.

More volatility is expected during today in my perspective.

GOLD! Well, it is to be expected that the markets are going a little wild in light of the Federal Reserve’s Open Market Committee meeting and presentation of statements. After dropping the word ‘patient’, the world would be completely data dependent during that time. It appears that traders are growing less optimistic about the interest rates rising and they have turned their focus to the strength of the USD, which continues to surge higher. What was shown was that all stocks and this included the commodity Oil and Silver saw increases. Currencies that also enjoyed a pip increases were the AUD, NZD, JPY, CHF and CAD all traded higher. This did not exclude our precious metal Gold which increased higher than where is started off earlier in the day. However, the increase did not exactly breakthrough any major support nor resistance levels and did not make it to higher peaks it seemed to settle into its self and enjoy the slight increase. In my opinion Gold will see a decline I don’t feel enough was discussed to help this commodity in regaining its ‘safe haven’ status.

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Today’s Trading Tip:

With the announced FOMC decisions to lower their forecasts for, GDP, interest rates, inflation and unemployment of which the result was the increase in all majors I am not certain this will hold up for very long. The USD in my opinion will continue to strengthen. Trading today on long positions on the majors is walking on the wild side. If you have the guts to trade on Stocks, Oil, the EUR, GBP, AUD, NZD, JPY, CHF, CAD, Silver, and Gold today ensure it’s in the short term.

Happy trading!

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Jason B Kruger

Professional Trader at WhyOptions
Jason B. Kruger is a Professional Trader & Chief Editor for WhyOptions.com, who is considered ‘The Authority’ on Binary Options Trading Strategies, Reviewing Brokers,Providers and their Products.
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