OpenBook Traders Take Position Ahead of Fed Press Conference

January 25th, 10:01 pm by Sam

(eToro Blog) Ahead of the Fed Rate decision, OpenBook trader pyruss has closed several positions on the EURUSD. The trader has been scalping during the European session and looks for opportunity to sell the EURUSD as it approaches 1.3000 and buy the EURUSD when it approaches 1.2950. This technical trader believes that the EURUSD is giving bearish signals in the short term. He keeps an eye on fundamental news as well as European stock markets when making trading decisions on the EURUSD. This trader who has 380 copiers on OpenBook is heading into the Fed rate decision with several short EURUSD trades with entry price from 1.2700 to 1.2900. If the U.S. Dollar gets stronger after the Fed press conference, this trader and his 380 copiers will be in a good position.

As it was, the Fed announced no changes to interest rate policy and said in fact that they would hold interest rates at their historic low levels beyond the originally anticipated mid-2013, now until 2014. The Euro-Dollar rallied on the news and is, as of this writing, trading at 1.3092.

OpenBook guru NMarijus, who’s every word and trade is analyzed in detail by his followers and copiers, is a EUR/USD bear, as well. This trader is expecting volatility from the FOMC rate decision and has several EUR/USD short position exposures ahead of the rate decision and is targeting the EUR/USD to reach as low as 1.2725. He, too, would have benefited from a bullish U.S. Dollar.

OpenBook trader Gavinwright has been buying Gold ahead of the Fed rate decision. This trader, who has 105 copiers, expects the U.S. Dollar to get weaker and Gold to get stronger after the press conference. He has closed several long Gold positions already and has left some long EUR/USD and long Gold positions open before the Fed press conference. The trader has since closed out many of his open longs to varying gains, ranging from 0.75% to as much as 8.0%.

Movement on Wall Street is fairly muted ahead of the conference. The Dow is down 42 points, the Nasdaq is up 17 points and the S&P 500 is down 1 point at the time of writing this report. The Pending home sales report showed that there was a drop of 3.5% in December. The pending home sales index dropped to 96.6, which is still above the December 2010 levels. Economists say that housing markets still remain strong due to the progress made in the last few months of the year. While the Fed did keep rates on hold as expected, it was the Fed’s new communication protocol that is attracting attention from traders and investors. The Fed has said that they will publish forecasts from policy makers for the first time in an effort to provide better guidance to financial markets. The Fed also has new voting members as part of its yearly shuffle. Traders on OpenBook are primarily long the Dow (DJ30) with average limits at 12,750 and stops at 12,500.