We expect ramped up volatility this week with the Fed releasing its FOMC minutes. Most analysts and the media talking heads think a quarter percent rise in the Fed funds rate is coming. This would send a positive message from the Fed to markets around the world that the US economy is stable and getting stronger. The accompanying rise in interest rates would cause some stress in industries which are still recuperating from the financial meltdown in 2008.
Whether the Fed raises the Fed funds rate or not we expect volatility in the majors as Forex traders take positions on both sides of the fence.
EUR USD-We expect fiber to continue to trade in a range as retail shorts continue to pile on and are stopped out as the pair moves higher.
GBP USD-We expect cable to continue to trade in a range and continue to move up towards 1.5400
USD CAD-After a big move up last week we think loonie is setting up for a big move down. The question to be answered is whether the move up is over and the correction will start right away or will there be further upside prior to the downside correction.
AUD USD-We are still Aussie bears, and continue to see AUD USD trading back and forth in a 300+ pip range between 7.000 and 7.0400 We expect Aussie to dip down below .7000 at some point before making a big move back up. Retail traders continue to pile on long and are being constantly stopped out as the pair moves back down.
GBP NZD-This pair has been in a downtrend for months with intra day volatility and large whipsaw movements intra week. Last week the pair dropped 500 pips in 1 day. It looks like the pair may have found support.