Donald Trump has won the elections to become the next president of the USA.
As a trader, I’m sure I’m alone in feeling a bit overwhelmed and wondering just how to handle all these wild market moves as the market tries to re-price itself in a direction nobody yet knows.
From the National Australia Bank’s morning note:
“US equities appear to have latched on to the idea that Donald Trump means more growth via an increase in fiscal spending.”
S&P 500 15 minute
So I guess that’s how you’d go about trying to make sense of the big intra-day V shape that price printed?
More from NAB:
“For the AUD, risk sentiment will be paramount. The prospect of tighter US monetary policy is a negative, but if equities remain buoyant, given a stronger US growth outlook, then this should provide support for ‘risky’ EM and commodity currencies.”
Again, do these sorts of explinations make sense of the price action?
This sort of explination has a very headlines for headlines sake feel to it and as a trader I have no conviction that there will be follow through because of the reasons given.
In saying that however, we are traders and I wanted to offer the one piece of advice that I always end up coming back to. That being: Can you ever go wrong trading intra-day off of higher time fram levels? With proper risk managment, the answer is no you can’t.
The fact that in Aussie, with all the panic selling in a direction that might not have been the most obvious, the major AUD/USD technical levels were still respected sums this up to a tee.
Take a deep breath and let things play out a little more before making any directional decisions. This is only the beginning.
NZD Official Cash Rate: -0.25% cut to 1.75% as expected.
NZD RBNZ Rate Statement
NZD RBNZ Press Conference
NZD RBNZ Gov Wheeler Speaks
USD Unemployment Claims
This is a guest post originally appeared on Vantage FX. Reposted with permission.