Volume spikes (on futures) and daily key reversals (CHFJPY, EURJPY, EURUSD, NZDUSD and USDCHF) suggest that a larger corrective move is probably underway. The implications are for USD and JPY weakness, strength in stocks and commodities, and weakness in US Treasuries. As written Friday, keep it simple; identify key levels and know what you’ll do when those levels are reached.
Volume on the futures contract (AUD) reached its highest level since October 4th. The rally that ensued at that point is unlikely to be duplicated but one should expect a move back towards 9900/40 before selling pressure reemerges. NZDUSD (not shown) carved out a key reversal Friday and expectations are for a move back towards at least 7680.
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Jamie is the author of Sentiment in the Forex Market.