Things are still very uncertain and direction is hard to find. Some could say markets are taking a breather, a normal correction after such decisive mood, others, that they are turning around. Personally I don’t know, but the previous move was so exaggerated, that this pull back was very expected. Comparing to yesterday, the swings are small but still into 100′s of pips. Like I mentioned yesterday, I don’t want to commit to anything outside of day trading, and the smaller time frame the better. So I was nipping at EUR-JPY to the upside, just like stated in my last post.

In actuality I was using 5M charts, but I compressed it to 15M for a better picture here. I took 2 trades, one netted 55 pips and after which I got more ambitious and the second trade produced 115 pips. This were simple upside breakouts, nothing fancy. Later in a day, night my time, there was one more great up move, but frankly I was so tired that I went to sleep and missed it.
For tomorrow, plan is to do more of the same- upside breakouts on small time frames of JPY crosses. If Pound seems stronger that Euro, I’ll use GBP-JPY, otherwise EUR-JPY is my vehicle of choice.
Reserve bank of Australia cut rates to 6%, one full percentage point, expectation was 0.5%. Since I was asked, I don’t really have an opinion about AUD. Why? At this point is way too event driven, but longer time frames point to farther deterioration. Now, as far as Yen goes, chances are we have seem the worst of sell off is over. I’ll post some older charts of Yen crosses later, for a comparison. You might find it interesting. Current environment is not suitable to trading for everybody, so one should be carefull, but the potential rewards can be substantial. Trader’s discretion is advised.

Mike K.