FX Chicago
http://www.fxchi.com
Ready For A Big Move
by Richard Regan
The USD is setting up for a substantial move. After days of continued downtrend, we see a tight range consolidation. This is almost always the sign of high volatility to come. The obvious play is to get on board in whichever direction it breaksout/down from todays range. But don't get fooled by a quick move that appears to be the start of the trend. Be patient and make sure an abundance of buyers or sellers have entered the market, then just look to get good prices and ride the trend. News came out today on the personal spending accompanied by comments from Fed Governer Lacker indicating a strong US economy. As my traders pointed out to me today, after a big down move, if good news comes out, and the USD does not rally, shouldn't we look for a big short on any negative US news? The answer is yes, but there is no need to develop a bias right now. Just make sure you recognize it relatively early and stay in the direction of the move.
CONSOLIDATION RANGES:
EUR/USD: 1.2705-1.2740
USD/JPY: 117.20-117.70
The GBP/USD already made a nice upmove today, while other currencies remained flat against the USD. I would steer clear of this pair until we see some more developments. Nice resistance just before and around 1.9100.
Still plenty of economic releases and speeches this week. I still believe that the probability of big moves is high this week. My currency pair of choice to watch this week USD/JPY. Good luck.
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