-36,504 USD: A Volatile Week with FOMC and ECB in Focus! Key Points for USD/JPY and EUR/USD
Trading Results for January 20–24: -36,504 USD
The week was marked by significant events such as President Trump’s inauguration and the Bank of Japan’s interest rate hike. Heightened market volatility and difficulties in adjusting strategies resulted in substantial losses.
Trading Review
Strategies and Challenges
- Bitcoin Long Positions:
Entered positions anticipating a bullish trend due to improved market sentiment and a weaker USD following Trump’s inauguration. However, unexpected pullbacks and rapid price movements led to consecutive stop-losses. - USD/JPY Short Positions:
Positioned for JPY strength on expectations of a BOJ rate hike. However, the market had already priced in the move, limiting potential gains.
Weekly Forex Market Review (Week of January 20)
- USD/JPY:
Declined to 154.78 due to market concerns about Trump’s policies and the postponement of tariff announcements. Later rebounded to 156.75 amid a risk-on sentiment fueled by stock gains, closing around 155.50. - EUR/USD:
Maintained a steady rise, briefly reaching 1.0457, driven by strong equity markets in the US and Europe. However, uncertainty over Trump’s policy agenda limited further directional moves. - GBP/JPY:
Climbed from the upper 189 range to near 193, supported by risk-on sentiment and easing selling pressure on UK gilts. - CAD/JPY:
Volatile, fluctuating between 107.00 and 109.00 due to conflicting reports about US tariff policies. - AUD/JPY and ZAR/JPY:
AUD gained on stock market strength, while ZAR remained firm against both USD and JPY.
Outlook for the Week of January 27
USD/JPY
- Bias: Neutral
- Key Focus:
- FOMC (Jan 28–29): Rates are expected to remain unchanged, but Chair Powell’s remarks could significantly influence USD movements.
- Economic Data: US December Durable Goods Orders, January Consumer Confidence Index, Q4 GDP (Preliminary), and January Core PCE Deflator.
EUR/USD
- Bias: Bearish
- Key Focus:
- ECB Meeting (Jan 30): A fourth consecutive rate cut is anticipated, which could exert downward pressure on the euro.
GBP/JPY
- Bias: Neutral
- Key Focus:
- Limited UK economic events; movement likely influenced by Trump administration remarks and FOMC outcomes.
CAD/JPY
- Bias: Neutral
- Key Focus:
- Bank of Canada (BOC, Jan 29): Expected rate cut may trigger CAD selling pressure.
AUD/JPY and ZAR/JPY
- Bias: Neutral
- AUD: CPI data could trigger significant moves.
- ZAR: SARB monetary policy decisions may drive direction.
Key Events to Watch
- Jan 28: US December Durable Goods Orders, January Consumer Confidence Index
- Jan 28–29: FOMC Meeting
- Jan 30: ECB Meeting, South African Reserve Bank (SARB) Monetary Policy Announcement
- Jan 31: US Core PCE Deflator (January), Australian Q4 Producer Price Index
Strategies and Focus Points
- Trump Administration: Closely monitor policy announcements and statements for forex market implications.
- FOMC and ECB: Focus on comments from Powell and Lagarde for guidance on major currency movements.
- AUD and ZAR: Prepare short-term strategies based on key economic indicators.
Summary
The market continues to experience high volatility. Adapting to post-event price movements and maintaining strict risk management will be crucial to success in the coming week.
Afterword: Nutrition and Mental Health for Traders
For traders, maximizing focus and decision-making requires maintaining not just physical but also mental well-being. Surprisingly, diet plays a key role in this.
The Gut-Brain Connection
Recent studies highlight the gut-brain connection, showing how diet significantly impacts mental health. Gut bacteria aid in producing neurotransmitters, helping regulate mood and stress—a field now known as “nutritional psychiatry.”
Recommended Foods for Traders
- Omega-3 Fatty Acids: Found in salmon, walnuts, chia seeds, help improve cognitive function and reduce stress.
- Fermented Foods: Yogurt, kimchi, natto support gut health and stabilize mood.
- Whole Grains: Brown rice and whole-grain bread provide stable energy and uplift mood.
- Leafy Greens: Spinach and kale, rich in B vitamins, promote brain health.
- Berries: Blueberries and raspberries are rich in antioxidants, effective for stress reduction.
Foods to Avoid
- Ultra-processed foods and sugary items
- Excess caffeine and alcohol
- Saturated and trans fats
Small Steps Towards Better Health
Start with small changes like adding one vegetable a day or swapping sugary drinks for water. Keeping track of how your diet affects your mood can help you identify what works best for you.
Trading demands both mental and physical energy, so aligning your diet with your needs can be the key to long-term success. Take a moment to reassess your eating habits to boost daily performance.
Here’s to a more stable and profitable trading week ahead!
