Next week rounds up some important events for Forex traders. FOMC interest rate announcement is scheduled for the 23rd. While no big changes in policies are expected, markets will likely react in some form. Over last few weeks most of the major central banks held their periodic meetings. No surprises were recorded, yet markets managed to stage moves of some magnitude, even if those turned out to be large spikes.
As always, I’ll be an observer, rather than participant, unless I already have a trade in, based on other criteria. Central Bank of Norway is another one with interest rates decision this week. Outside of that, G-20 meeting will provide news, so all eyes on Pittsburgh.

I received surprisingly large number of emails following the price action post from yesterday. Thank you. In order to not become repetitious, most of the questions will be answered when updates are made. They should be frequent. I’ll create separate category for this post and updates, so its easily to find and track. Back to central banks, Swiss National Bank news release few days ago is one example of the spikes that happen even without any surprises. Initial reaction turned into sustained move in couple of Franc crosses, most notably GBP-CHF, which simply dropped for the rest of the week. Somewhat of a tradition lately. Most interesting to me was movement of EUR-CHF, because of a trade I had in this cross. More precisely, two buy orders were pending. By now both of them are  filled.

This is one of the weakest trades I’ve been in for some time. My line of thought is that price will start turning here soon, which maybe as long as 1-2 weeks, given what time frame is used. I largely expect to stay above 1.5100. If it wasn’t for the fact that the recent swings here are relatively small, second buy order would have been cancelled.
Dollar Index post described possible trade in GBP-AUD. This trade didn’t happen and is called off. I might return to this pair later in the week, but trade parameters will be different. For now order is placed in another Aussie cross, this time AUD-JPY.

Intermediate term chart of this pair shows fairly wide congestion zone, with an upward bias. I want to buy it at 80.10, with an objective of about 250 pips. It is not expected to happen rapidly, and draw down could be deep. As it is customary on Sunday, I’ll be looking for opening gaps. They don’t happen very often, but can be profitable if formed, just like last week.

Mike K.