High Volatiity and No Direction Equals High Risk for Medium-Term Traders
Given the unusually high level of volatility and general hold on sentiment-based trends, my positioning was mixed through the day. The sharp drop in the yen on the BoJ speculation has benefit my USDJPY long position; but I would have rather seen a rally from the single currency to drive my CHFJPY short lower. Given my time frame for the latter is shorter and targets nearer, and I am in small size with USDJPY for a much longer haul, the reasoning for my preference should be clear. Interestingly enough, neither the discouraging minutes nor a general move towards risk aversion would help out my AUDCHF short.
Given my assessment of uncertainty, my list of potential positions has been whittled down. Though I would not trade it unless under ideal conditions, EURUSD is nevertheless an important pair to watch around 1.30 into the end of the week. That being said, the first opportunity to really take a position should be on Monday (provided we are given a good reading). All things considered, I think EURUSD will eventually revive its bear trend; but for an offset to this exposure, a bullish break from EURJPY above 112.75 still looks tempting. On the Aussie-side, I'm still keeping an eye on AUDCAD and AUDNZD - though the former has broken above 0.92. Finally, CADJPY has once again held its long-term rising trend support; but that may not hold for long.
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