Friday proved to be another busy day for Forex traders, just as it has been for the past couple of weeks. While no truly huge moves developed, the activity level remained high, with virtually all currencies showing healthy, tradable price swings. The Euro is showing some weakness, with markets speculating on ECB interest rate cut soon. The commodity currencies maintain good daily ranges, even if their overall, longer-term direction is not necessarily clear. In addition, the Yen keeps on getting stronger, building possible larger-scale reversal patterns in all its crosses. More on the JPY in coming posts. All said, these are good trading conditions, especially with short-term positions in mind.
As indicated in the last post, I was looking for short-term trades at the start of the London session. One of the currency pairs I always watch for these trades in the GBP-USD. Unfortunately, this time things did not work out as intended. The price indeed formed an attractive range, but the breakout came too early for me, before the “trigger time”, which prevented the trade. Not a tragedy by any stretch of imagination, since the following move was very erratic and worth maybe 25 pips at best. I would have been lucky catching maybe 15 pips of that. Perhaps a lost opportunity, but a weak one and to be forgotten. Besides, there were other pairs, which behaved much better.
The AUD-USD, for example, moved eaxactly in the manner for which this strategy was designed. Its price went flat in hours before the London open, forming a tight range. I placed a straddle around it and the sell order was executed soon after. The AUD-USD made a straight, directional swing down, quickly reaching my objective of 30 pips. Have a great weekend!
Mike K.