My positioning hasn't changed materially since last week; but that is a good thing. I have been tempted by a few pairs; but the fundamental and technical conditions haven't lined up to instigate meaningful moves. For price action, that translates into a situation where we will struggle to produce any meaningful movement and it will be exceptionally difficult to force breakouts or leverage momentum. That said, there are still very appealing setups up there; we just need to wait until they fit the bill of being an active trade.
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As for my existing trades, my yen short exposure on EURJPY and USDJPY has performed very well. The former has easily cleared that temporary 120 break and is now 150 points higher. That said, it is time to trail the stop up once again from 117.45 to 119 (plus 255 pips). The same encouragement is seen on USDJPY which cleared the 84.50 highs back in November/December and now targets 86 as the next swing high. In fact, many of the yen crosses are driving through resistance; but I don't want to leverge myself in a single position (short yen).
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A new setup for the day is a small short on AUDCAD from 0.9955. My interests really lay with the overdue reversals for AUDJPY and AUDUSD; but there is a greater fundamental burden to meet the technical requirements of such a turn. For such a move from these two, we need a concerted risk aversion effort that will pull equities, carry trades and other 'risky' assets down. In contrast, both Aussie and Canadian dollars are considered commodity currencies; and it has a far more congestion pattern to work with with a stop and first target of 85 and the limited exposure, I am taking is slow with this pair.
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For potential, there are really great setups out there. Both the AUDUSD and AUDJPY are near the top of the list should the former drop below 1.02 and latter below 86.50 (perhaps higher after its recent surge). Much of the opportunities out there require risk resolution either from the broader market or particular catalyst. For general risk trends, I think NZDUSD has a good opportunity to reverse is steady run, NZDJPY would play the same yen run, even GBPUSD is likely playing to risk trends (and may currently be forging a head-and-shoulders pattern. And then there is a specific catalyst. EURUSD follows this track as we await the ECB rate decision and a clear move above 1.43 or below 1.40.
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