 Wednesday, FOMC and FOMO could potentially be going on, right? So Mark made a comment, did anyone catch the move? And I'm sure you guys have seen the Euro dollar and if you're new as well, by the way, one of the things that I haven't traded the news for maybe a couple of years now, in a sense that I don't sit around and wait for the news to print. More than likely the news has been priced in, basically to the price. So the only time I really am looking to trade the news, if I'm looking to trade it, is if there is some sort of major unexpected move. And even if there is an unexpected move, let's just say, for example, as an example, the central bank is going to, what would be the biggest thing you could probably expect? Maybe a central bank is looking to high crates, yeah? So you see our high kin rates, or you see the market pricing from early, because the market likes to price in, you know, two, three, five, 10 months in advance, as we know through, for example, bonds, right? And bond yields and bond prices could be even years in advance, yeah? But let's just say they're expected to high crates by the time they actually high crates. So it's by the rumor, by rumor. So the fact, yeah? By the time the hike actually comes, if this is priced and that's time, it's the reason why you don't really see much reactions anymore to news events, because it's already been priced in, yeah? Now, where the edge is, is if there's a surprise. So let's just say the central bank is meant to high crates, so that's normally positive for a currency and it appreciates a currency, but then all of a sudden, the central bank end up cutting rates, right? Just to say we're in fantasy land, but they do that, yeah? The market has to then reprice, yeah? Reprice what they thought, you know, if that was the exchange rate, whatever that exchange rate is, maybe two, yeah? Now it's no longer seen as two, because now they're cutting rates rather than hiking rates. So that's where you want to look for trading opportunities. But if the market, let's say, for example, it comes out as expected, yeah? But we still get higher prices while it continues to go higher. All right, that's cool, isn't it? Right? We probably would have been in from down here because we understand fundamentals and we're always trying to be ahead of the curve anyway. But let's just say you're new and you don't really understand these things, not yet. Once the news comes out and it continues to go higher, all we're looking for is just pullbacks. We don't ever foam her in, you know what I mean? We're not trying to be drawn in by price because price is manipulated every single second of the day, you know what I mean? So for me, it's about the edge is really where there's unexpected news. And even if you miss the unexpected, let's say for example, again, the central bank end up cutting rates rather than hiking rates, this ends up being, normally it ends up being a CPR anyway. Right, because there would have been traders buying as we go higher, then we get the surprise, the shock, the capture, the pain, and then the relief, yeah? If prices ever do come back up here, there's definitely gonna be traders caught in this area. So there's always a second chance at some point to get involved in, you know, the trade or you can just continue to look for pullbacks at supply zones. You might necessarily get in at the absolute stop, but if it is an absolute shocking, if it's an absolute shocking or unexpected news event, yeah, just get in on pullbacks. That's all you're looking for is just pullbacks into, of course, supply zones, whether it be daily or intraday or CPR zones, and then look for that, yeah? So that's the way I look to kind of trade the news. Yeah, but that's what I was gonna talk about, the Euro just quickly. So my thesis on the Euro dollar is that if you, if this doesn't follow through and it doesn't look like it's following through, then I am prepared for more shorts, but I'm not basing my decision on price action. There's no way I'm basing my decision on price action. No, no, no, no, no. I'm basing my decision on news, right? Oh, Chris has got feed, right? So I'm basing my decision on the news. So this is the latest article on Bloomberg. So this came out, I think maybe about, what's that, maybe about an hour ago. And it's quite interesting. The Fed keeps zero rate outlook, sees inflation bump short-lived, yeah? So it says central bank sees inflation settling back after jump, after jump this year, seven officials see higher rates in 2023 up from five before. So higher rates, yeah, in 2023 means that in 2023, by 2023 or into 2023, they should want to hike rates. So they're looking all two years into the future, right? So let's actually, matter of fact, let me play this article and we can kind of dissect this. So rather than looking to follow price, yeah? This could just be, which I think it is. Obviously I could be wrong, but if price doesn't follow through, it will have all of the hallmarks of getting people and getting traders to FOMO in. And this is what Mark was saying, FOMO, because all they do and how, if you still trade like this, basically not on talking about where you see a massive candle, then you feel that you're gonna miss out because price should end up going higher, right? There's momentum there. There's prices are following through. But again, the question is, why is prices following through? Did the Fed say something out of the ordinary? Did they say something that should weaken the dollar? Yeah, this has to be the question. Why are you buying? This is why I can never subscribe, ever, ever subscribe to just technical analysis alone. It just doesn't make any sense to me. But yeah, let's basically break down this article now, yeah? So, you know, I've kind of skimmed this. So I know kind of roughly what's in it, but I thought I'd leave it for our group call. So let me know if you guys can hear it as well, by the way, I'll pause it for a second. Fed keeps zero rate outlook, sees inflation bump short-lived. Can you guys hear that? Yeah, all right, cool. So let's go through it now. Federal Reserve officials continue to project near zero interest rates at least through 2023, despite upgrading their US economic outlook and the mounting inflation worries in financial markets. Right, so for me, that is still positive, right? So yes, they're continuing to project near zero interest rates. So at the moment, I think we're at 0.25 or something like that. Is 0.25 the economic data? Interest rate, the US, yeah, 0.25, right? So they're basically near zero. And so they're just basically saying, you know, that interest rates are probably gonna stay there because remember inflation is rising, or supposedly rising, so they're not gonna be cutting rates, not at all. But also as well, it says despite upgrading their US economic outlook and the mounting inflation worries in financial markets. So there's inflation worries, meaning inflation might get out of hand, going beyond their usual 2% target. So it's still looking positive. Does everyone understand this, by the way? Yeah, if you don't understand, let me know. If you don't understand, let me know. Yeah, I'll take your silence for everybody is understanding what I'm saying. Yeah, okay, cool. So everyone understands why that isn't negative. In fact, that's probably more, more a bit more hawkish, not necessarily in their language, but it's positive for the dollar, right? It's definitely positive for the dollar, especially when you compare it to what Europe is saying in the ECB. Anyways, let's continue, let's continue. The decision, which came on a volatile day for investors with treasury yield surging ahead of the announcement, masked a growing number of officials who saw a lift off before then, though Chair Jerome Powell stressed this was a minority view. The strong bulk of the committee is not showing a rate increase during this forecast period. Powell told a virtual press conference Wednesday following the decision, adding that the time to talk about reducing the central bank's asset purchases was not yet. Seven of 18 of... So they're basically just saying, look, we're just in a wait and see. We're not reducing asset purchases. What is asset purchases? It's basically bond buying. So at the moment, they're buying a certain amount of bonds. I don't remember exactly how much billions it is, but they're buying bonds to support the market and buying basically government debt. Now, a reduction in asset purchases will be positive again, dollar, because they don't necessarily have to print so much. They don't have to expand their balance sheet. They have to print so much to buy government debt, meaning that the dollar should want to strengthen. So what they're saying is, is that they're saying, adding that the time to talk about reducing the central bank's asset purchases was not yet. So they will be in the future, because remember, we're always future thinking. Always thinking of the future. We're not reacting. We're trying to be proactive. So it's just not yet, but it's on the horizon. So they're talking about reduction. The thing is they're not talking about increasing asset purchases, are they? This is how we have to think. They're not thinking about that. The conversation is a reduction in asset purchases and it's just not yet. So again, more positive dollar news. Officials predicted higher rates by the end of 2023 compared with five of 17 at the December meeting, showing a slightly larger group who see an earlier start than peers to the withdrawal of ultra easy monetary policy. According to the Federal Open Market Committee, quarterly economic projections issued alongside its policy statement. Right. Just again, just quickly, I don't want to keep pausing it after every single paragraph, but just quickly it says seven of 18 officials predicted higher rates by the end of 2023 compared with five of 17 at the December meeting. So that's basically more of the Fed officials are seeing or predicting higher rates. So there's more of the consensus is getting higher in the view that they may hike rates by the end of 2023. So that's again, another bullish sign. If it went from five to seven, right? But if it went from maybe five to two, then that would be negative, right? Because then there'd be less officials thinking that they were gonna hike rates, but it's increased the view consensus is growing. Let's just continue on. Indicators of economic activity and employment have turned up recently. Although the sector's most adversely affected by the pandemic remain weak, the FOMC said in its statement, inflation continues to run below 2%. Follow reaction in real time here on Bloomberg's top line blog. The Fed expects that a bump in inflation this year will be short-lived. Officials saw their preferred measure of price pressure slowing to 2% next year following a spike to 2.4% in 2021, according to the projections. Excluding food and energy, inflation is for... Yeah, so just quickly, remember we always have a 2% target, yeah? So what they're saying is, is that their preferred measure of price pressure slowing to 2% next year following a spike, yeah? So this would be after a 2.4% increase in inflation in 2021, so this year. So they're expecting, their expectation is for 2.4%, which would be above their inflation target of 2%, but then they expect inflation to kind of cool off to around 2%, yeah? Excluding food and energy, inflation is forecasted to hit 2.2% this year and 4% to 2% in 2022, but that, again, is all positive for the dollar, yeah? Cast a hit 2.2% this year and fall to 2% in 2022. 10-year treasury yields remain near one-year highs after the statement with stocks reversing losses. Asked about the moving yields, Powell noted that it was important conditions continued to remain accommodated and that he would be concerned by disorderly markets, repeating the line he used earlier this month. Massive fiscal support and widening vaccinations that will help reopen the economy have buoyed investor expectations for rate increases in inflation, propelling treasury yields higher as the Fed and federal government keep adding stimulus. Wednesday's decision was unanimous. Asset purchases, US central bankers left asset purchases unchanged at $120 billion a month and repeated that this space would be maintained until substantial further progress is made on their employment and inflation goals. The target range of the benchmark federal funds rate was also kept at 0 to 0.25%, where it's been since last March. Powell and his colleagues met as the economy continues to improve. Job gains picked up last month and President Joe Biden signed an additional $1.9 trillion of pandemic aid into law on March 11th. Vaccinations continue apace, allowing states to start easing lockdown restrictions that could release a torrent of consumer spending. That's positive. The economy remains far from the Fed's goals, though. Even with 379,000 jobs added to payrolls in February, 9.5 million fewer Americans have jobs compared with a year ago and inflation remains well below the Fed's 2% target. This particular downturn was a direct hit on the part of the economy that employs many minorities, Powell said. Still, prospects for stronger growth have ignited some concern about higher inflation, contributing to a rise in 10-year treasury yields in recent weeks. Powell told lawmakers in testimony last month that the economy still has a long way to go before there's any risk of overheating. They also upgraded forecasts for economic growth in the labor market, with a median estimate for unemployment falling to 4.5% at the end of 2021 and 3.5% in 2023, while gross domestic product was seen expanding 6.5% this year, up from a prior projection of 4.2%. Christopher Waller, who joined the board of governors in late December, contributed projections for the first time this month. So after hearing that, was there anything that anyone could say was negative within this article? It sounds more positive than negative, right? You would agree? Yeah, sounds definitely more positive, definitely more growth as we saw in the last paragraph. They also upgraded their forecast for economic growth in the labor market with the median estimates for unemployment falling to 4.5% at the end of 2021 and 3.5% in 2023, while gross domestic product was seen expanding 6.5% this year, up from a prior projection of 4.2%. Doesn't pretty much get more positive than that, right? Again, there are cautions, there are definitely concerns, nothing is set in stone. But remember, this is a, I guess, a by the rumors, so the fact situation and as long as the data still supports, this is the key thing, the data has to support the narrative. So as long as data comes out and you start to see positive, you're still seeing positive GDP numbers, positive inflation numbers, yeah? You can just literally continue to buy the dollar. That's literally, this is a trade idea that you can have for a very long time. And then you basically trade against a currency that maybe isn't doing so well, yeah? So when we go back to the euro dollar, yeah? What do you think the smart money are doing? Anyone know what the smart money are doing? Do you think they're buying or they're probably looking to get by the dollar at a, that's exactly it, Paul. That's exactly it. Because then you would go to the euro and say, well, what's so positive about the euro? I was watching, I was having dinner, I was watching the news. And Europe threatening the UK to about trade, talking about the trade between the UK, they're gonna disrupt it or do whatever because if the UK don't give them more vaccines, for example, the AstraZeneca, right? So there's problems there in Europe. Their rollout is far behind everyone else. So for me, yeah, and also as well, the EU, UK, Ireland, Irish border as well, exactly. There's problems there, right? But just in general, when it comes to the vaccine rollout, yeah? They're having problems. They're having problems. So for me, this is definitely not gonna make me FOMO 100%, it's not, if anything, I'm just looking for trades to the downside. So what I would probably look for just to wrap this up would be, can anyone see what kind of a trade this may look to be? What kind of set up? What kind of set up would you see, would you think that this is or could be? Stop hunt, yeah. Maxwell's on it. Stop hunt, you're starting to see. Nice little level. Nice accurate level there as well. Turn that to nice levels. Yeah, nice ranging market. Going a bit more detail, you can start to see that area there. You had support, support, resistance, support. Yeah, let's drag that back as well. Nice support and resistance in and around there. So it is a level that has been used. It's been used there, used there. All right, we've got a nice ranging market. Yeah, bounce off there, bounce off there. It's definitely not trending. Now, this is where the FOMO, this is gonna be a very nice stop hunt if this happens. Yeah, if you start to see a breakout above that level there and then it starts to come back inside, that for me is nice, is very nice. So let's see what happens there. Let's see what happens there also as well. It's best to check what bonds are doing. So bond yields, 10 year, 10 year sold off a little bit, but it's coming back. So I still at the highs, I still at the 1.64, it didn't sell off massively, right? Look at that, if you're looking at that from the perspective of any kind of pullback, that isn't really any kind of sign of a reversal. If it started really falling like this, then I'd be like, hmm, there's something there, right? There's maybe they're taking it negative, but we just read the article, bond market are the smartest guys in the room. There's really no kind of sell off, maybe some sort of profit taking or something, maybe just a bit of a deeper pullback, but overall doesn't justify, definitely doesn't justify the Euro dollar move. So for me, that I think would be a really nice manipulation up top for a short trade. And if not, if that doesn't work out, then fine, there's gonna be other levels up top around here that I'll be looking to take as well.