Markets have definitely changed behaviour over last couple of weeks, and most notably, this week. Daily ranges have contracted dramatically in relation to last few months and are closer to historical averages. This means that market dynamics are much more typical now, if there is anything like “typical” or “normal” in trading. I don’t mean this to be a prediction, but since it is almost middle of December, this kind of market conditions might be prevailing for the best of the year. The month of January is normally very lively. Those who got spoiled during last few months will have to adjust now, while others can breath easily.
Financial Times had an article about Pound today, more precisely about EUR-GBP and possibility of parity. Long list of economic reasons were listed why it is likely. Since I’ve been following EUR-GBP over last few days, I read it. The tone of article reminded me of press releases calling for EUR-USD at 2.0000 about 6 months ago and EUR-USD 1.0000 over last few weeks. While this might happen(anything can) this has a making alarmist journalism near market extremes.
My own trading in EUR-GBP, was, well, slow.
With the pair making new high, I moved my sell order to 0.8720. Objective here will be 50 pips or more, depending on the size of preceding up move.
Market changes were most visible to me in GBP-JPY. Moves are very tentative, shaky. Lots of really small swings.
On the first trade I got out at probably the worst moment, loosing 27 pips, but “reloaded” right away and pulled in 60 pips. Shaky behavior made me decide to close third trade with minor gain, right before the market decided to push on. Such is trading.
I posted a possible trade in EUR-AUD yesterday. My sell order stands there for now. Intermediate term chart was used, so it might take some time before this trade even happens.
New Zealand dollar looks like it is getting ready for some move and I’m placing a buy order for NZD-JPY.
Entry level is at 51.32 and objective 52.20. NZD also looks good against USD and AUD. I don’t think we should expect any powerful move, but who knows? After few days of slow down, there might be some spark, even if it doesn’t last very long.
Mike K.
Looks like movements just stalled, real change from a couple of weeks ago. You might be right, Christmas “blues” is upon us.
Michelle, how is your MA’s trading strategy coming along. Getting any results with it?
Project is still under construction. Winners are large but there is too many loosing trades. I’m struggling to develop a filter, which would cut down the number of loosing trades. I’m stuck here and don’t know how this is going to work out. If traded as is, system would be modestly profitable. Another problem I have is that in current format it is in conflict with my job, so I’ll have to make some changes. I’m working on it.
[…] often than not, month of December is regarded as difficult to trade by market participants. Not that it is ever really easy, but last month of the year presents even […]