At the very least, this week will be fundamentally exciting; and at best, we could have significant market activity. Major scheduled event risk can inspire volatility and trend development; but that can be good or bad depending on how you approach it. With the event risk this week, I have some existing exposure that is put at risk by the potential for volatility. On the other hand, there is substantial potential leveraged through this round of fundamental catalyst.
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From my existing stock, all three pairs I still have exposure to are at some level of risk from the big event risk this week (specifically the FOMC rate decision, US GDP and UK GDP). My long USDJPY is close to its stop level at 81.50; and Wednesday's rate decision looms. The biggest reaction to this particular announcement though is a bullish breakout; so the risks are still skewed in my favor. The EURGBP short I have from 0.88 has turned to congestion and the UK GDP reading is on tap. Here too, I have an ongoing bearish bias against the euro; and my outlook for the pair puts the pound on a higher footing - though it currently does not have the favor of the market. Here, a bullish or bearish outcome has equal opportunity for market activity. That said, the GBPJPY short I have is also exposed. On the other hand, having already hit my first target and trailed the stop on the remaining half of the position to +115 pips; I'm not too concerned about this pair.
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In fact, I think there is significant potential for this particular yen cross. Recent congestion on GBPJPY between 134.65 and 135.85 offers up a good opportunity for a short-term breakout move that could very well be triggered by the UK GDP figures. A bearish outcome would further best be served by a meaningful move towards risk averison. There are good sterling setups further beyond GBPJPY and EURGBP. I'm waiting to see some resolution on GBPUSD after its break above 1.6445. I'd like to play a long setup; but a disappointment from the UK data or improvement in the US outlook could easily tip this pair into a reversal (it's tradable on both accounts). GBPAUD is carving a consistent, bearish channel that could offer a new move on a reversal above 1.5430. Then there is GBPNZD which is itching for a breakout on a tight, terminal wedge after its sharp decline. Here, I'd perfer a bullish resolution as a rebound could move further.
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Other pairs to file in the optential category: EURUSD on a break below 1.4500 (initially a short-term reversal); AUDUSD as it drops below 1.0675, 10585 and 1.0425; CHFJPY should it want to drop back below 91.50, EURCAD on a channel break and AUDCAD after it struggles to make progress on a move above 1.02.
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