By: Jay Norris, Senior Market Strategist and Forex Educator

Despite some early drama on the downside during the Tokyo session the major currencies recovered during the U.S. morning session to continue their previous lazy pace.  The Yen pairs recovered also though still remained in negative territory. You can see on the TrendMap below how the short-term trends on both the Weekly & the Daily time frames are lower for AUDJPY, EURJPY, GBPJPY & USDJPY. These trend has been in place in for several sesisons now and certainly makes sell triggers near the previous daily highs attractive.  

Shrinking ranges for all the markets may be enough of a reason to start to dust off counter-trend strategies if volatility doesn’t pick up in the first half of September.  The ATR  on the EURUSD Weekly chart below is typical of all the markets with both price ranges and volatility shrinking. This is also a reflection of global interest rate policies, and a reminder that the volatility seen in the least quarter of  2007 and all of 2008 was an exception.  

Going into the new month I would look for a continuation of what’s on the board already: Yen pairs ease lower while the majors trade flat to slightly higher.






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