ASIAN SESSION is relatively dry today. I was expecting YEN VOLATILITY to be the theme of the week. Unfortunately, Yen has disappointed. Seems like a case of "BUY THE RUMOUR, SELL THE NEWS".
The NY SESSION last evening was a quiet trading session. Hardly any strong moves or trends. That can be attributed to US Bank Holiday.
Theme of YEN PLAY
The YEN PLAY for the past 3 months has proved to be highly profitable for many traders, both professional and retail. Even though nothing much has changed for Japan on the fundamental level, the sentiments has changed. The G20 decision not to take action against the Yen Devaluation did not create the desired effect of spurring on more speculation. Rather, it killed off volatility.
The past 3 months has been good while it lasted. George Soros made a killing betting against the YEN. http://www.guardian.co.uk/business/2013/feb/15/george-soros-bet-against-yen
Now, even though the DAILY RANGE of YEN PAIRS are 80 - 100 pips a day, the retracements are deep, and the trend is unclear. The BREAKOUTS in yen pairs are also weak. The break will occur, and price will quickly retrace back to the breakout point and erase all profit. Typically, the Asian Session will see yen pairs trending and moving strongly in one direction. So far, that hasn't been the case this week.
Thinking in THEMES
While the HOT MONEY has started to flow of YEN currencies, we can expect speculation in other pairs. The question is where?
In the meantime, since market is trading in a WIDE RANGE, it is advisable to take profit every 20 - 30 pips.
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