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Volatility hits 6 month high in many Forex pairs − What does this signal?

Pierre Charlebois from Trading Metro at 12/07/09


Friday's moves in many Forex exchange rates as well as other key markets, is signaling just how much anxiety is pent up in traders who are now hanging on every new news item being released.

Technically this indicates a break out or reversal is taking place or is about to. Seeing where we are on the Dollar index and in particular the EUR/USD the balance of the year will prove to be interesting to say the least. I dare say, many a trader and investor will look back on this time as one of the most interesting if not bizarre times in the markets.

USD index - Will the break-out be real this time? How much pull-back might be seen?

EUR/USD - The current structure still qualifies as an ending diagonal but the size of the drop can not be ignored. Is there a final top left to come or is this the beginning of a drop. The Price is truly at cross-roads.

I've supplied two opposing potential counts on the shorter term.

GBP/USD - This pair did not drop as much as the EUR/USD but the candle pattern suggests a bearish potential.

USD/JPY - The reversal was overdue - The question now is where will the retrace come?

USD/CHF - Will the break-out hold? The move is not yet truly constructive

AUD/USD - This pair is also still in a range

NSD/USD - This pair is not yet quite constructive on the downside either. Range may still hold

USD/CAD - Another range bound pair

EUR/JPY - Is there yet a new top to come?

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