Liquidity is fading quickly. Not only is the upcoming session the final 24 hours of this trading week; but for a large segment of the trading world, it is an early exit ahead of the holiday weekend. While there is a better chance this year of volatility during this otherwise quiet period than years past; it is not putting the probabilities in your favor to bet on big moves.
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Just coming back from vacation, I can take a more objective look over the past two weeks than would have been possible had I been here. While day-to-day volatility has been elevated and the fundamentals are really rolling; there really hasn't been a meaningful trend to speak of. That is a valuable assessment for me; and it helps to reinforce the belief that I need to sharply decrease (or increase) my trading horizons to meet realistic objectives while also reducing my trade size. Another (unfavorable) side effect of limiting my trading was that I held off from trading some of the great pending setups I was tracking before taking off (a GBPUSD break below 1.5750, a EURJPY reversal from 111.50/112.00 and bullish momentum on a AUDNZD break above 1.32). No use lamenting.
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As for my current interests, I have cut exposure heavily heading into the Christmas weekend. The EURUSD short I had from 1.33 hit my 1.3215 first target in the interim; but it doesn't seem prudent to set a second objective that requires another meaningful break (below 1.30). Therefore, taking off the entire position seems more prudent. Aside from that, my AUDCAD short was stopped out and the second half of my NZDUSD long ws knocked out at breakeven over the past week. My USDJPY long is still on; and I'm largely ignoring recent stress on it - chalking it up to liquidity.
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New to the mix is a very reduced NZDUSD short from 1.7475 with a 100-point stop and first target. This is based on a former support standing up as new resistance and a unique volatility event from the morning that needs to be unwound (specifically that it is odd this pair should rally when risk trends were quiet and New Zealand GDP disappionted). Aside from that, I'll be watching for a short EURUSD below 1.30, a short GBPUSD below 1.53 and double top reversal from AUDCAD; but those will all take time and contengencies. For short-term opportunities; I'm watching EURGBP and NZDJPY for small ranges.
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