Expanding Volatility

With the USDX closing at the higher levels with an increase of volumes for the start of the week have made it all possible to to try to break the resistance prices above, that would signal a renewed confidence of USD acceleration.

The start of the trading week for the FX market has never been as volatile as the surprising numbers from the ADP's report on jobs creation that triggered the steam for the USD to move higher. To top it off were the decrease on the unemployment figures; which the government has always taken the limelight every time good figures comes out of the market place. Of course who wouldn't!

With the expansion of the bail-out fund have prompted the EURUSD to continue to head lower at lat year's levels where a re-test of the 1.2880 figure would not be discounted. As the prices neared the lows of 1.2887. A natural corrective move would be expected as the week moves forward with some reports on earnings are expected to be fairly friendly to the USD. As the USDX have moved from a wide range; as mentioned from our last market analysis that the Average true range of the USDX is between the 78.65 and the 81.45/50 basis points.

On the technical front, looking at the candlestick configuration on most majors pairs have shown an engulfing pattern that clearly defines the relative movement dominating the market sentiments. As the wider price ranges continue to move on both directions it would be significant to take note that if a trade position would not be able to sustain an average fluctuation range of 150-250 pips on the HI LO range then it would be wiser not to trade unless a significant amount would be used for risk. Although, the equivalent reward would be greater, the only remaining problem would be to avoid getting cashed-out at a loss at the early part of the trading day before it moves to one's favor.

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