Can a New Trading Week Finally Deliver Trends with Top Event Risk?

It's a new trading week; and our hopes are renewed for trading potential. With liquidity and a dense economic docket laid out in front of us; we could be looking at another opportunity to jump start intermediate trends in underlying investor sentiment. Since I look for positions that usually last north of three days and have generous risk/reward potential; medium to long-term swings are the best overall conditions for me. However, I am going to temper my expectations of a true trend developing developing some time this week. It is true that we have scheduled event risk to base a trend on; but we have seen similar circumstances recently and nothing has developed aside from congestion. That being the case, I'm going to hold on to those positions that have good medium-term potentail but can also survive a period of stabilization. At the same time, I'm going to start looking for short-term setups and see if quick range-based or breakout moves can offer something up in the meantime.

Addressing significant changes first, my EURAUD short was taken off for profit at the end of last week at both its first (100 pips) and second (200 pips) targets. I meantion the amounts to give some color as to my positioning method (multiple targets with a trailing stop in between). Replacing that position today, I took on a long GBPCHF trade on a reduced size at 1.5850. Trading a smaller position is essential here because I lack confidence that it will hold again and the volatility is very high. My stop is 1.5760 and the first target equals this risk.

Amongst my existing positions, I am still short EURUSD and GBPUSD - which have benefit today's risk aversion move. I still believe we are within congestion for investor sentiment, however, so not too excited about these at the moment. Interesting developments with USDJPY. The pair drops after the BoJ expands its stimulus efforts. This is interesting as it likely is a combination of the market ignoring the move and unwindig carry and the belief that the effort will provide short-term market relief (but perhaps long-term pain). Regardless, I still like the technicals and fundamentals of the upside; so I just need to be more careful entry and patience for confirmation of the trade going my way. Finally, AUDCAD is still hanging near the upper end of my acceptable range, waiting for direction.

As for potentials, I am keeping my eyes out for short-term swings. GBPCHF is one of those by virtue of its volatility. Since I only update once a week here, it isn't the best forum for my short-term trades. For these intraday moves, I'll be updating in the Real Time News feed. That being said, I'm watching AUDNZD, GBPNZD and EURNZD with particular interest at the moment.