We closed off yet another week with our algorithm's Thursday projection on the Aussie and Loonie hitting the real weekly close on interbank price feeds. There were plenty of opportunities to take profits on intraday swings, not only on Friday but throughout this week of volatility in the Forex markets.
It's the kind of trading conditions that professional traders have been waiting months for.
All the talk of the Fed raising rates next year is only further fueling the bullish trend in equities. The S&P broke a new high and closed off the week hovering the previous July 20th high that looks to have attracted a cluster of sell orders playing it safe.
On the Forex side of things, we're seeing similar price action as the Loonie major struggles to break the resistance of seller liquidity between 1.0950 and 1.0980 - typical order flow patterns of shorts looking to catch a near-term high coupled with existing longs getting cold feet about the potential trend continuation.
This places the Loonie right around the 50% retracement range from the last long-term highs around 1.1275 back in March, so hopefully you took your profits on the reversions to the projected Friday close. Going forward, it looks safer to take a wait and see attitude before scaling into any longer term positions on this pair.
Meanwhile, the Fiber and Cable continue to break new lows, blowing past support levels as entire walls of stop orders are triggered.
Overall, it's nice to see an early return of volatility this year before the start of September but it's all the more reason to trade safe. In any kind of increasing volatility environment, it's not a good idea to keep your stops too close.