Volatility in the Yen pairs is likely to continue for the rest of the week. In early hours on Thursday, the Bank of Japan will conclude its policy meeting. While nobody expects change in the interest rates, markets will pay attention to news about its asset purchase program. Realistically, the only possible outcome that concerns traders right now would be in form of restrictions, or slowdown to this program. If there is no change, the focus will shift to the G20 meeting in Moscow. Some predict strong rebuke for Japan for its strong easing policy, although most of the countries in this group are taking similar steps and have no right to complain. We will probably see something what G7 said yesterday, a non-committal, general comment. At the same time, markets respond in strange ways to events like that and we should be aware that increased volatility is possible.
I do not see the type of chart behavior that presents good trading opportunities today and have to wait for more price history to build up. Meanwhile, I will place a straddle trade in the USD-CHF, using its hourly chart. This pair has formed a well-defined flat base, stretching from 0.9148 to 0.9213. It is narrow and should not last much longer. Because the preceding direction was up, probabilities favor a bullish continuation. I am taking a non-directional approach, looking for 45-50 pips either way, perhaps as early as on Thursday.
Mike K.