No market moves quite as fast as the Forex market does.
Last Friday’s post covered the correlation between US Dollar strength, Trump’s upcoming Presidency, and the Federal Reserve’s relationship with the President Elect over the next 4 years.
But before our experts could talk about the “yoogue” bullish movements, the USD fell bearish.
Our experts’ long-term analysis shows the USD on an uptrend, but the current depreciation of the dollar didn’t come as a shock after Trump’s January 11th, 2017 press conference.
Many investors found the President Elect’s conference to be too vague; lacking crucial details of his fiscal stimulus plan, and in turn, the future of the USD.
When investor sentiments follow trends like this, it’s not unusual to see bearish movements.
While it’s outlandish for anyone to think Trump would disclose a full plan for his policy agenda before being sworn into office, investors clearly needed additional insights to continue what was a bullish movement for the USD.
The good news is movement means money and there are plenty of great trading opportunities our expert Forex traders are taking advantage of right now and even bigger ones on the horizon.
In fact, there are so many fantastic Forex trading opportunities, Deutsche Bank’s Macro Strategist, Alan Ruskin, created the five stages for “Trump-Trading” to help investors better prepare their trading plans.
Currently we’re residing in stage 2, the deal-making phase. This should span over first 100 days of Trump’s presidency. Here’s how one of our expert Forex Analysts is planning to profit during this stage.
Forex Analysis – Trading in Stage Two
Our expert analyst, Tyson Clayton, is no stranger to political volatility. He made thousands of pips during the big Brexit news, and now he’s ready to navigate the potentially massive market volatility spurred by the far-reaching changes of Trump’s campaign policies. Here’s what he has to say:
“Fundamentally speaking, [these movements] make a lot of sense. President Trump has been on record saying he believes the U.S. Fed has created a potential bubble due to easy money policies. The thought from the market is the Trump administration will be much less Fed friendly thus leading to potentially multiple rate increases in 2017. This will cause the USD to rally over the longer term.
But, we also know the market trades at levels based on expectations of future events and that the market doesn’t move in a straight line.
With that said, it’s fair to assume a lot of the USD bullish expectations might be priced in for the short term and looks to be due for a pullback.
This ties in perfectly to what we are seeing in the charts with our expectations for the USD to have a shorter term pullback to create the technical retracement lower. This will also give the market time to digest some of the initial policies put into action within the first 100 days.
After the digestion period (that causes the short term retracement lower), we can expect the initiatives of lower taxes and other economically stimulative policies to start working their way into the system. Inflation numbers should start to rise on the back of new policies, thus supporting the augment for more rate increases leading to a renewed rally in the USD.
Below is a chart of the USD/JPY and my quick analysis on how I plan to trade it. [This is] my favorite trade based on the expectations of a short term USD pullback followed by a renewed rally.”
Planning Your Profits
Based on Tyson’s analysis you could be looking at a very hefty payday in the near future. 2,700 pips of opportunity could bring you $27,000 when trading a standard size lot, or even $2,700 when trading a more conservative mini lot.
The payout may be different, but the movements stay the same. It’s up to you to decide how much you’re willing to risk to reap the rewards.
With a buy zone quickly approaching, it’s imperative that you create a strong trading plan, so that you are in the optimal position to make profits. After all, in the Forex market, an opportunity can leave just as soon as it arrives.
As Trump continues to put more policy requests into place, we are going to see some fluctuations in the U.S. Dollar, and you can bet our analysts will be on top of it all, providing you with updated market insights and their trading styles that you could mimic to see similar results.
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