Year has almost come to an end, with the most anticipated event/holiday coming this week- Christmas. One way or another, everybody is effected on personal or professional level. Just yesterday, while shopping, some women turns and says to me “I have enough of Christmas!”. A little surprised I answered “Lady, Christmas isn’t even here, yet”. “That’s what makes it so bad” she replied. Don’t know what her particular problem was and didn’t stick around to find out.
On a more familiar territory, trading should be dramatically different this week. As it is typical during this time of the year, one should expect liquidity to dry out, trading ranges to contract and markets falling into sleepy mode, reflecting sentiment of the season. No large important announcements are scheduled, everybody will be taking time off, so just about the only events that could create movement are unexpected news. New war, or something of that nature. “Unexpected” is the key word here. Anything on the calendar will likely have little influence over markets. The just ended Copenhagen climate summit is an example of scheduled news. In the end, conference produced no enforcable agreement, nobody left Danish capital happy, yet somehow the outcome is hailed as “great step forward”. Amazing!
It might be a good idea to take it easy, or even skip trading altogether this week. I myself don’t plan trading past Tuesday and still lower size of transactions. Don’t see a reason to be serious. If I had any travels planned, I wouldn’t bother at all, but since I’m staying home, will do light trading for couple of days.
Japanese Yen is still in a holding pattern. Hard to say which way the crosses will go as a group and they should be analysed based on individual merits. At this point I like CHF-JPY chart, if looking for a buy. Possible entry level is on a breakout above 87.12, with a target of 88.25 or so. This set up right now is mostly attributable to strength of Swiss Franc, and Yen being innert, or neutral lately. Some change from earlier in the year. Interestingly, JPY is still diverging from USD, and seems that this trend will stay.
I’ll be looking for short term trades in pairs like GBP-JPY. As always on Sunday, opening gaps are possible, and could present last chance for “easy” opportunity before holiday, Christmas bonus, if you will. But for the most part, should be a quiet week, with focus on things other than trading.
Mike K.
Did you get in the franc/yen trade? Looks like this pair opened at around your entry price. How do you deal with it?
No, I didn’t get in, precisely because of how it opened. New entry is above the high. It will be covered in next post.
Are you still following eur/aud, with what you call “price action” trade? Is the trade on?
Yes, trade is on. I’ll try to update it in next post.
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