We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.91% 🇳🇿NZD: 0.64% 🇨🇭CHF: 0.59% 🇬🇧GBP: 0.17% 🇨🇦CAD: -0.02% 🇯🇵JPY: -0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/j3MpbrNtG4
  • RT @SecPompeo: I applaud @Nasdaq’s actions to require all listed firms comply with the same auditing and inspection rules, especially as re…
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Gold: 0.88% Silver: 0.43% Oil - US Crude: -0.31% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/s7unTde0G5
  • The #FTSE 100 surged to its highest level since early June on Wednesday after the equity index pierced a longstanding technical barrier around 6,200. Get your #FTSE market update from @PeterHanksFX here:https://t.co/uFaYFaPGz2 https://t.co/mNnlGDksJn
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.30%, while traders in US 500 are at opposite extremes with 76.93%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/kZcqWecOdG
  • The $EURUSD's climb continues at an exceptional pace. It is on course for the biggest three-week rally since May 2015 (the bottoming after the 2014 collapse) https://t.co/AbDLQ07D95
  • ECB's Lagarde says we are at low point of this crisis today - BBG
  • US Treasury Yields: 2-Year: 0.194% 3-Year: 0.250% 5-Year: 0.400% 7-Year: 0.633% 10-Year: 1.393% 30-Year: 1.626% $TNX
  • Wonder when this’ll reverse 🤔 Highly recommend checking this piece out ⬇️ https://t.co/lrQDt3oLDZ
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: US 500: 0.02% FTSE 100: 0.01% Wall Street: 0.01% Germany 30: -0.09% France 40: -0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/lVtLGVVPJs
Volatility and Trend are My Two Gauges for Trading

Volatility and Trend are My Two Gauges for Trading

2014-04-12 04:56:00
John Kicklighter, Chief Strategist
Share:

Volatility picked up this past week - though not evenly - and pushed the markets towards developing serious trends. Heading into the new trading week, volatility and risk bearings are key to establishing both direction and momentum for trends.

Over the past months, we have seen numerous swells in volatility cannibalized by short-term speculative interests looking for quick opportunities to 'buy the dip' or 'sell vol' (same thing, different market jargon). If this recent spurt of fear is destined for the same, there are a number of weakened risk-sensitive pairs that can use trendlien tests as meaningful springboards for returning to trend - USDJPY above 101, EURJPY above 140 and GBPJPY above 169.

In a long yen cross position, I would prefer the USDJPY. All three have high-profile trendlines, but USDJPY has held the line despite a uniform drop for the greenback across the board - while the euro and pound have done well elsewhere (that suggests a more animate candidate on a turn).

For the alternative - risk aversion. the other two pairs are my preference. A technical break and confirmed risk aversion theme are my primary confirmation, but I will also be wary of scheduled event risk on the docket - particularly UK inflation stats Tuesday. If the price pressures back off, the sterling will be pitched into a decline of its own.

If weak data does inflict the sterling I will look at GBPUSD once again. A timed break of 1.6700 on the data may make for a decent short-term scenario, but my real interest is the 1.6500 break - still a ways off. Yield forecasts are very aggressive for the UK and they have recently been battered for the US. A moderation (which can happen in low volatility too) could pull this pair back.

The same moderation from the dollar may not cut it for EURUSD. A higher yield and capital inflow is keeping the euro elevated. But the closer we move on 1.40, the more on-edge the market is and the more likely it is the ECB makes a move. This is not a precise situation and will thereby be difficult to trade. I may just wait for a more serious bearish move at lower levels.

Carrying forward my positions, I still have my EURAUD and GBPAUD shorts as they slowly play through on their head-and-shoulders breaks. The Aussie has wavered recently, but it hasn't confirmed a bullish break of recent channels. I'll keep my stops trailing though. Also, my longer-term (and lower leverage) USDCHF and AUDNZD long positions are progressing. The former is in the red with the euro's rally, but my doubts about EURUSD and the EURCHF 1.2000 floor offer strong support. My AUDNZD long is in the money, and I'm monitoring yield forecasts for the RBA as the market tries to divine the first hike.

Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.