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
Bearish
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
GBP/USD
Bearish
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
USD/JPY
Bullish
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • Heads Up:🇯🇵 JPY All Industry Activity Index (MoM) (DEC) due at 04:30 GMT (15min), Actual: N/A Expected: 0.3% Previous: 0.9% https://www.dailyfx.com/economic-calendar#2020-02-21
  • Feb 28: - Fed speak - US🇺🇸 income/spending data, consumer sentiment - India🇮🇳 + Canada🇨🇦 GDP - Consumer confidence: New Zealand🇳🇿 + UK🇬🇧 - CPI: Germany🇩🇪, France🇫🇷, Italy🇮🇹 + Eurozone🇪🇺 - South Korea🇰🇷 industrial production Click here ⬇️to learn more https://www.dailyfx.com/webinars/146770987
  • Feb 27: - Bank of Korea🇰🇷 rate decision - French🇫🇷 President Macron meets with Italian🇮🇹 Prime Minister Guiseppe Conte - Norway🇳🇴 sov wealth fund publishes annual report - US GDP🇺🇸, durable goods data - Economic confidence data in Italy, Eurozone🇪🇺 - Vietnam🇻🇳 trade + CPI
  • Feb 26: - EIA crude oil 🛢️inventory report - South African🇿🇦 Finance Minister presents 2020-21 budget which will likely impact their sovereign credit rating - Hong Kong🇭🇰 GDP - US new home sales🏠learn why housing is important here: https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2019/12/30/Why-Markets-Will-be-Closely-Watching-Housing-Data-in-2020.html
  • Feb 24: - Trump meets with Modi - German🇩🇪 IFO business confidence - New Zealand🇳🇿 retail sales - China🇨🇳 may announce decision to delay annual meeting National People's Congress Feb 25: - World Bank President speech - GDP: Germany🇩🇪, Mexico🇲🇽 - US🇺🇸 Consumer Confidence
  • Hello there, traders! We may have a potentially volatile week ahead of us against the backdrop of panic from the #coronavirus🦠: Feb 22: - #G20SaudiArabia (Main topic will be global impact of virus) - Results from #IranElections2020 (hardliners expected to make a big splash)
  • The #Euro may bounce after hitting the lowest level in close to three years against the US Dollar. While the broader trend points firmly lower, selling pressure may be ebbing. Get your market update from @IlyaSpivak here: https://t.co/697SQ9AGxw https://t.co/BLxeiLzcLR
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Silver: 0.45% Gold: 0.27% Oil - US Crude: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/3CldFB8zgt
  • RT @YuanTalks: #China's passenger #car sales slumped 92% y/y in the first half of February due to the #coronavirus outbreak, said the Passe…
  • My trading video for today: 'Dollar's Run Earns $EURUSD, $USDJPY and $AUDUSD Breaks; Nasdaq Fronts Risk Retreat' https://www.dailyfx.com/forex/video/daily_news_report/2020/02/21/Dollars-Run-Earns-EURUSD-USDJPY-and-AUDUSD-Breaks-Nasdaq-Fronts-Risk-Retreat.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/nUMqyxrVag
Forex Strategy Outlook: Volatility Guaranteed, Breakouts Attractive

Forex Strategy Outlook: Volatility Guaranteed, Breakouts Attractive

2011-10-31 17:35:00
David Rodriguez, Head of Product
Share:

An exceedingly busy economic calendar points to major moves in the Euro/US Dollar, US Dollar/Japanese Yen, and other key forex pairs. We favor trading high-volatility strategies until further notice.

Keep up to date with key event risk via our DailyFX Economic Calendar.

DailyFX Individual Currency Pair Conditions and Trading Strategy Bias

forex_strategy_forecast_trading_body_Picture_1.png, Forex Strategy Outlook: Volatility Guaranteed, Breakouts Attractive

DailyFX+ System Trading SignalsA very busy economic calendar promises major moves in Euro, US Dollar, Australian Dollar, British Pound, and broader forex counterparts in the week ahead. Recent market moves have proven a mixed bag for our Breakout Opportunities and Optimal Entry trades. Yet as we wrote last week, we would ignore any EURJPY, GBPJPY, or AUDJPY sell signals in the face of fairly significant uptrends. Our bias saved us from significant losses as the Bank of Japan intervened and stopped these trades out at significant losses. We will continue to ignore EURJPY, AUDJPY, and GBPJPY short positions until further notice.

Otherwise we like trading breakouts in US Dollar pairs. This means Breakout Opportunities on EURUSD, GBPUSD, while USDJPY short positions could actually work quite well. Yet any USDJPY short positions should be taken with low leverage given the persistent risk of Bank of Japan intervention.

Market Conditions:

Our 3-month volatility index has dropped significantly, warning that price action may slow through the medium term. Yet heightened event risk keeps 1-week expectations quite high, and indeed we are braced for sharp moves across key pairs into the days ahead.

forex_strategy_forecast_trading_body_Picture_2.png, Forex Strategy Outlook: Volatility Guaranteed, Breakouts Attractive

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To contact David, e-mail drodriguez@dailyfx.com

To be added to David’s e-mail distribution list for this and other reports, e-mail subject line “Distribution List” to drodriguez@dailyfx.com

Definitions

Volatility Percentile – The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 90 days of trading. We have found that implied volatilities tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its medium-term range.

Trend – This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near monthly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair’s monthly range.

Range High – 90-day closing high.

Range Low – 90-day closing low.

Last – Current market price.

Bias – Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest Vol Percentile and Trend indicator figures make Range Trading the more attractive strategy.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.

OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. The FXCM group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance contained in the trading signals, or in any accompanying chart analyses.

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

DISCLOSURES

News & Analysis at your fingertips.