Market Commentary & last weeks performance 19th Nov 2013

November 19, 2013 in Forex Analysis

At the time of year, Forex volume tends to drop off into Christmas so the pattern we are currently seeing – fairly random price action with volatility spiking on news events allowing the market makers to run stops – is likely to continue. It is going to take some significant news events to break the current logjam and kick off trending moves. The latter is unlikely at this time so short term swing trades are the best approach here. It is important to avoid trades that are too obvious with stops in conspicuous places where the market makers will take them.
The dollar index is acting in a confused fashion making it difficult to get a directional bias as the dovish Yellen appointment at the Fed has relaxed tapering fears.  This is in contrast to the equity market and S+P 500 were chasing momentum in the past few months has worked well as this market continues to be pumped up relentlessly by the Fed. The event risk coming up this week is largely based on the Fed speak schedule and in addition the BOJ has a rate decision on Thursday.
Performance this week was on +1.67% on AVA and flat on Shelbourne Markets.
The link to the AVA Myfxbook account is here
EURUSD- the odds of a move up or down look 50:50 here to me so I am standing aside on this for now. If I see a buy or sell extreme from a support or resistance area I will then use this to take a view.
GBPUSD- sterling is acting quite strongly backed by some good fundamental news from the UK recently. If the dollar index price action supports the move I will be looking for a run to 1.6260.
USDJPY- this pair is straddling the 100.00 zone pinned there by huge option expiry positions (billions of dollars apparently). If the price holds above 100.60 for some time, this may be a signal that the price will break higher out of the wedge. The yen pairs did act v strongly this week squeezing shorts. Against this is the time of year argument above. The BOJ rate decision on Thursday will be important.
AUDUSD – this pair along with related pairs GBPAUD and AUDNZD looks interesting. There is key resistance at 0.9430 and I will be watching to see if the bears can get the ball there for a return to the 0.92 -0.900 zone. Again, we have to see how the dollar index and QE taper bets line up as new information is released.

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