Daily Trade Recommendation

There is nothing to really trade today as European & UK newsflow is quiet, however I will be paying very close attention to the FOMC minutes later in the New York session.

The reason this data point is of interest is because the minutes will contain details on what the Federal Reserve were thinking and talking about during the last policy meeting. We want to know if some of FOMC members feel that interest rates could be raised sooner or later.

We are looking for the FOMC to become a little bit more hawkish, and give us some clues about whether they are leaning more towards a sooner rate hike or not. Any indication of how close the FED is to its first interest-rate increase is the most important question which the minutes could answer.

This data point could be tradable, particularly on USD/JPY, mainly because I feel this pair is undervalued at the moment, it’s been pressed down by various factors for many months which has kept it ranging. The fundamentals suggest that USD/JPY should be going up at some point, we just don’t know when.

You could get in before it’s released, as there’s a chance it could come in more hawkish than expected because we are looking to see if the FED recognise the recent data and the fact NFP came in so good over the last month. Or you could be more cautious and wait until after the FOMC minutes to be released to look for any hawkish, or possibly dovish comments.