Nothing like a political mess to inject some volatility into the market. I’m surprised we haven’t had some European politicians taking pot shots at the States, but it’s early days yet.
An event like this can throw all your trading plans up into the air. I spoke previously about getting on some cable shorts at some decent tech levels up here, but such turmoil means the tech is likely to stand for nothing as the headlines will trump all. It’s annoying, as if you are a patient trader, who waits for the levels to come to you then this type of mess can blow your strategy out of the window. As we are fond of saying though, there are always opportunities arising where others disappear.
The euro might give some ground on a solution appearing in the the US but I wonder whether cable will be so keen to give up the gains? USD/CHF should be a fairly decent US trade but that’s all over the shop as is EUR/CHF.
USD/JPY is the ultimate trade and I’m surprised it’s been so calm. There’s still an offered tone to it and maybe the shutdown isn’t what the bears are waiting for. The debt talks on the 17th October is the biggie and so we will have to tread water until then (barring any major headlines). The big US data could be knocked on the head and so we’ll be in the dark about the US economy for a while.
Unless cable really moves to ridiculous levels I’m going to leave it alone, save for my usual, small big figure trade and I’ll be keeping an eye on moves to 1.63. I’m still short USD/CHF on that break from the 0.9080/9130 range and I’m still very interested in picking up the buck should we see USD/JPY down towards 95.00. I’ll be wary on any dollar shorts, as Trader YT pointed out in the comments, any positive news could see see shorts bolting for a very small exit. The nerves are going to be there and so it will pay to keep trades tight and flexible. A solution WILL come. When and where is open for debate, but always bear that fact in mind when you trade.
So how has the US problems affected your trading strategies?
Have you let decent tech levels go as a precaution of possible headlines?
Are you factoring in the news or have you changed from trading economic fundamentals to political ones?
Thoughts welcome as always.
USA: Always open for business (except when politicians throw their toys out the pram)