Best way to trade Bernanke speech is with no fixed position
Honestly I feel that it could go either way after the prepared speech is released at 08:30 am NY time and the grilling in front of Congress begins 90 minutes after that. My tendency is to be bearish on the USD but I feel that I am in a significant minority. It’s unlikely that Mr Bernanke will come out with any major surprises so the best way to trade it is to have no (or very small) positions and use volatile swings as trading opportunities.
I still believe that the reaction of EUR/USD after last week’s FOMC is a very telling indicator. If we start to get another such reaction tonight, then it will be time to go “all in” on the bullish EUR/USD trade.