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Low Momentum Begets High Momentum!
By Sean Hyman | May 7, 2009
Yesterday was the “ho-hum” day for intra-day traders. However, low volatility begets high volatility. It doesn’t have to occur the very next day…but one thing’s for certain…if there’s low volatility for a period of time, your “radar” should be on alert for the breakout because it will usually be powerful and directional.
Today is that day. The yen is tanking against the commodity currencies the most (NZD/JPY, AUD/JPY) but also is tanking vs. the euro too (EUR/JPY). So all of these pairs have bolted higher to the top of the percentage gainers on the list.
That means that “today”, big traders are “risk seekers” and have their offensive team out on the field. They’re buying commodity currencies predominately.
NZD/JPY is up a whopping 3.29% so far on the day and AUD/JPY is right behind it at 2.39%.
Also, as I’m writing, AUD/USD and NZD/USD are working their way up the lists. So they’re now buying up these currencies vs. the buck too.
So the theme of the day so far is yen and dollar selling (selling defensive currencies) and buying commodity currencies.
Also, I hope you noticed last night that Australia ADDED JOBS rather than lost jobs in their latest employment report. Their unemployment rate DECREASED.
Australia, in my opinion, has the strongest fundamentals of all major currencies out there right now. Therefore, if you agree, you’d want to look to AUD/USD, AUD/JPY, AUD/CHF, etc. for “long” opportunities as they arise and take them over other currency pairs that have buy signals with “lesser fundamentals”. Get started with a demo account today: http://www.fxedu.com/practice-forex-account
Sean Hyman
www.forextradingblog.com
Tags: alert, AUD, blog, breakout, buck, CHF, commodity, currencies, currency, currency pair, currency pairs, dollar, EUR, Euro, forex, forextrading, fundamental, jpy, nzd, rate, Sean Hyman, time, trade, trader, unemployment, USD, Yen
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