A Sudden Gasp of NFP Volatility before Liquidity Drains

Today's US nonfarm payrolls report generated more volatility than I had anticipated. However, the overall lack of follow through and immediate recession in liquidity after the release played out exactly was expected. We are heading into not only the weekend but an extended holiday for the US and Canadian markets as well. The net affect this has on a Friday is an early and complete drain of market depth. For my trading into the end of this week, it leaves me on unfavorable grounding especially with my only remaining "short-term" setup being stopped out (though it still looks attractive from a fundamental and technical perspective when assessed over a little longer horizon). Yet, this is the position I want to be in: holding my larger time frame positions and out of anything requires short-term volatilty to play out.

For activity on my book today, the most significant event was my being stopped out of my EURAUD long at 1.4035. It was low risk given position size, but high risk when considering I set a short-term and risk-sensitive position up before a event risk. This swing low distends my descending channel; but there is still precedence in support from 1.40 to 1.3950. Alas, we are at the weekend; and I set up that original position a reason: a short-term setup for a quick swing. My other active positions have a longer time frame and follow a further fundamental sightline (the only thin I should really be holding over the holiday weekend). Still on the book, I have my very reduced, long USDJPY setup. This pair made another failed attempt at pushing through 85. My EURUSD short is closing in on my stop near 1.2965 and modest resistnace at 1.2925 will be put under pressure through the unusual trading hours of Monday. Since the first half of the position is a carry over from the initial break at 1.3185 (the first half of that original position was taken off long ago for profit) and the second half is at 1.2700, the net risk on a stop is a modest loss. Then there is my reduced-size GBPUSD short, which I will move my stop up on to a decent buffer above 1.55 in order to limit risk. Important to note that this is uniformly long dollars. I don't like to leverage myself up on one currency or theme if I can help it.

Looking for potential next week, my USDCAD wedge interest has already played out with this morning's break. AUDUSD still has a very significant appeal to it, but it will take time to develop. Perhaps the most interesting position come Monday is GBPNZD. Having already played through its breakout, the floor of a rising wedge is now in view around 1.1350. Could be a good setup for a few days work.