The last day of the month saw some nice volatility today. Monday as usually followed the same boring scenario with currencies going nowhere. However, one thing you should have in mind that after very boring days with such low volatility there always follow days of huge moves, spikes and other things that make us traders earn nice money. One thing how you can prepare for Tuesdays if prices on Monday did not move is to define highs and lows of European, US and Asian sessions and then trade breakouts of those sessions on Tuesday.
This could be very well applied to eur/usd pair today. It was in a very narrow range yesterday. It stayed with 36 pip range during European and Asian sessions. How could we use the information? We simply place breakout entries at both ends of the range and enter short at the lower part of it and long at the upper part of it. The pair decided to go up, so we went up. One thing that has been pretty usual recently and is rather unusual on the whole, is that the pair broke upwards during Asian session. Although I do not recommend trading Asian sessions if there are no news releases scheduled, smaller positions can be taken if you have time to monitor them.
The same can be said about gbp/jpy which after staying in a very narrow range finally made a run up. It has come back to breakout level now though. If you remember I told you while talking about silver a few posts ago that there is bullishness in gbp/jpy. It still really is and we have to watch price action at the current support of 133.50 to see if it holds. If the pair stays in a narrow range through Asian session we might have good opportunities to go long during European session tomorrow.
I also want to talk a little bit about usd/cad. I hope you still remember that I mentioned on Friday (after market closed) about a possible short term downtrend, (breakdown) because the pair formed a clearly bearish pattern. You should also remember in my post about following the leader (the link is at the end of the post) that the pair was a loser in previous week move, when most currencies strengthened against US dollar and �loonie� failed to do that. It took this chance today and did it pretty well. I believe it is going to test the breakout level to see if current resistance (previous support) will hold. I am slightly bearish towards the pair, but that can be only my subjective opinion.
In terms of Economic news releases we have some data from Australia coming out in a few hours (Gross Domestic Product). That could create some nice activities in the market. Some data from US will be coming tomorrow in the evening, but I do not expect much from the release (ISM Manufacturing).
I hope you see that silver continued strengthening today as we have predicted. The move was not that sharp as I thought it would be, but still the commodity is well bought and remains in a long term up trend. I am ready to buy it whenever it retraces. The day will come for selling, but I don�t expect it any time soon.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.
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