We are now half-way through the Asian trading week, what is commonly known as “The Hump”, and this is always a good time to look over that which has already happened this week. The major questions we need to ask are:
- Where did we open this week?
- Was that open at range extremities?
- Is there a major fundamental reason behind any of the bigger moves?
- What’s been the average weekly range in recent months?
Take the EUR/USD for example. We opened this week close to 1.3800, but that was after some heavy short covering at the end of last week. The news remains bearish out of the EZ but there has been no major change. The average weekly range in recent times has been of the order of around 450 pips. Movements are still been driven by speculative players who will by definition, close their positions at some stage. Conclusion: If you’re so inclined, stick a bid in around 1.3375 looking for a 200 pip rally
