Thanksgiving week is typically different than other times when it comes to trading. Even though Thanksgiving is an American Holiday, it effects financial markets world wide. It comes on Thursday, with many people taking it easy on both Wednesday and Friday as well. Most of the week can be slow when it comes to trading. Historically first couple of days are the only real opportunities for sizable moves to develop, with maybe a possibility for a directional move during European session on Friday. I’ll cover that later on.

Last year at this time financial markets were very volatile. Most of the currency crosses had been approaching what later became bottoms/tops and daily moves were still very impressive. Currently trading ranges are nowhere near as wide, but started to increase lately. Commodity currencies are showing signs of possible reversal on important, longer term charts. I first suggested it about three weeks ago and posted a chart on NZD-JPY, as a representative of all these pairs. Here it is as posted at the time.

So far price behaved as projected. After establishing support at just above 63.00, price ran up to 67.00 and now once again is returning to the lower range. At the moment price is resting on 100SMA, important juncture.  If the price goes through this level, move under 63.00 would create sell situation, with an objective of maybe as low as 58.00. Right now I doubt it would go any lower an expect a bottom to form there. But first 63.00 must be broken, which is not sure yet.

Have to wait and see what develops here. I have not decided yet on taking trade using daily chart. Depending on how price behaves I’d prefer to use smaller time frames and take few trades instead of one, market permitting. Charts will have to create set ups which are recognizable to me, situations I consider “high probability”. This should be true for most of NZD, AUD and maybe CAD pairs.

Can this sell set up possibly work? EUR-USD is probably most heavily traded financial instrument in the world. By now everybody and their neighbors must see it wants to go lower. Major support has been established at just above 1.4800. Price dipped under it couple of times but without a decisive follow up. Most dreaded situation for breakout traders- deep pull backs, enough to shake most people out of position and resumption of trend. Move under 1.4795 is a sell with that caveat. If this happens, 1.4660 should be attainable. Unless this is too obvious and market will fool everybody. Or maybe just me.

Mike K.