I looked at placing a stop loss at $0.7270 for a move to $0.7550.
The pair came to a whisper from my stop loss overnight, but then reversed aggressively, subsequently moving just shy of my target. I have closed the trade idea this morning at market (currently $0.7492), for a profit of 142 pips or 1.9%.
The Federal Reserve meeting was obviously more dovish than expected and the market is clearly going through an adjustment process, trying to fully comprehend exactly how bond yields and the USD trades from here. I would not be surprised to see a period of greater volatility as markets search for natural equilibrium (if there is such a thing). Being nimble in trading seems key.
I looked at long US 500 cash trades on Tuesday at 2063 (the level at the time of writing). The trade seems to be working fairly well with the Fed being more dovish than what was priced in, causing a USD liquidation and strong rally in equities.
I think the meeting itself was very positive for stocks as the pure data-dependant model will give greater certainty to investors that the economy is ready to absorb higher rates.
I will stay long for now and move stops from 2035 to 2055, just under yesterday’s low.