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.
Toll Free: 800-971-2440
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.