Last couple of weeks remind me of behaviour of the ocean; massive storm came and created huge waves. Then the winds quieted down, but the waves are still churning for some time, with waves becoming progressively smaller. Eventually the ocean is relatively smooth, until next storm arrives. In a hurricane season the wait is not too long. That’s what happened to the markets- dramatic moves turning into smaller and smaller swings and now they are waiting for new force to move them. With fresh batch of fundamental announcements expected tomorrow, more moves should be on the way.
Here is an example of this relative calm before the storm, GBP-NZD

After huge up move, market settled into a range, at least on this time frame, with little clues about direction. Statically speaking, chances for another leg up are little better than down, but one never knows. I like this set up for a straddle trade. I have a sell order at 2.7610 and a buy order at 2.9100. This breakout might be good for as many as 1000 pips, but since it is 4H chart it can easily take a week or two.
I’ve been rather undecided about what to do today, as price action was unclear to me. I was looking at GBP-JPY for short term trades. After the sell off late yesterday, somehow I managed to miss the revers. But I squeezed in one trade, which netted 80 pips.

This was the highlight of my day. Tomorrow I’ll also be looking at AUD-USD. It has been moving like crazy and finally the spreads narrowed enough to resemble the conditions from before, like last month. In my view, tomorrow will be important, because it should give us some clues about next moves. 

Mike K.