Volatility Without The Volume: Signs Of Market Life Returning

Thin volumes but a bit more volatility yesterday with the Telegraph buoying the mood with an article around Germany softening its stance on the euro early on.

Although the economic calendar was relatively quiet, we did see the euro and pound test resistance to the upside on relatively strong moves (finally the markets might be starting to pick up again).

Interestingly, we got some decoupling in risk pairs yesterday as the euro put in a strong push compared to some of the other pairs. The euro move makes me slightly nervous in positioning myself long EUR/USD at this stage, the light volumes could exaggerate a move which could turn out to be more of a false break out than a real one. It will be interesting to see what today brings with the FOMC minutes and any comments out of the Eurozone meetings. Let's see if the euro holds.

EUR/USD
The euro broke upper resistance yesterday then pushed higher. We need to see if this holds today, then if we get confirmation we will look for good entry signals to get ourselves long. On taking a potential breakout trade ensure you protect yourself in-case it is a fake-out as opposed to a true breakout on the initial day.
GBP/USD
The pound broke higher with other risk on pairs but didn't significantly punch through the resistance line. A close above resistance today could open the door for further upside.

AUD/USD
Although a slight pop higher the aussie didn't make as significant a break for it, it currently sits in a mini range. A break of this could open the door for recent highs and lows.

USD/JPY
A slight drop again yesterday but given the recent break we are now looking for entry signals on a pull back towards the breakout level (previous resistance turned support).

USD/CHF
Trade potential within the range we highlighted on Monday played out well. Easy 50 to 100 pips if you caught this one.

USD/NOK
Our USD/NOK trade hit the new T1 yesterday and we took 50% of the position off the table for a very healthy profit, with stops moved down and a risk free trade now on the cards we intend to see if this one has any further to run (although we suspect that we might see some dollar strength shortly and this could reverse).