The US dollar did bounce around during most of the day on Friday as the 109 level seems to be attracting a lot of attention. This has been a very volatile currency pair, mainly due to the noise coming out of North Korea involving the Americans. This has people looking for safety currencies such as the Japanese yen, and I believe that this will continue to be the way going forward. There is a lot of noise crossing the wires at any given moment, and it does not seem to be settling down. However, I think the given enough time this will offer a nice longer-term buying opportunity, but it seems that the sellers are certainly taking control in the short term.
Small position sizes
I believe that small position sizes will be used and probably the best way to deal with a market that is going to be this volatile. However, if we break above the 110 level I believe that would show enough strength to turn this market around completely and have me buying larger trades. I believe that a pullback to the 105 level is possible, but there is even more support there then we are currently trying to see. It’s going to be very difficult market, and quite frankly subject to sudden changes in attitude as fear seems to be spiking around the world. Ultimately, the volatility continues to be one of the biggest problems dealing with this currency pair.
Written by FX Empire