The LFB's  Instablog

The same pattern as Tuesday emerged in forex trade today, with bursts of activity in inter-related markets spurring volatility in the currency arena. There is a pattern emerging that looks to be taking the onus away from Wall Street trade to be relied upon to generate forex moves, and it seems as though the end of the European vacation period has drawing back in sustainable moves in the 02:00 EDT - 08:00 EDT time-frame. That is music to our ears, after three months of dealing with a market that only has the energy and momentum to move in U.S. trade, in a session from 09:00 EDT to 04:00 EDT houses just 16% of global forex order flows, the moves have been sporadic and volatile.

The litmus test for Usd values, Usd/Chf. has dropped lower in Wednesday trade, although only managing at this stage to draw Jpy and Eur values into the frame. The earlier declines in Aud, Cad, and Gbp, have left them playing catch-up compared to the other three majors that held a tight range in overnight trade. The Fed's Beige Book will reveal FOMC member thoughts on the U.S. economy, and as such any new positions waiting to get hit may get a boost of momentum at 14:00 EDT. This is a short-dollar market, with trends now aligned after a period of melancholy trade over the summer. The energy has built, and in reality all the major currencies look to require is a quick dip to support, clear out the weak hands, and then to make the moves towards 2008 highs.

Clear