End of year markets can be extremely difficult to trade. EUR/USD is no exception. On one hand they can be extremely quiet as many big money funds have wrapped up trading for the year. Why risk losing profits as we head into the last two trading weeks of the year? These funds may have even been out of the market before the central bank meetings last week due to the uncertainty! However, on the other hand, there can also bursts of volatility due to the illiquid markets. If someone, such as a trader for a pension fund, needs to get a position on in a product, he or she can move the markets, as there may not be many ... (full story)
Joined Mar 2008
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Status: PVSRA with Traderathome
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"What’s in store for EUR/USD into yearend?...." We have no idea! And even if we did, we still cannot ever know how the MMs will manipulate prices!
This Week chart below has accompanied multiple posts now for more than a month. It is posted to bring awareness of a textbook pattern that could complete at any time. Here is some information.
Over a month ago the MMs dropped price into a former range last used by SM to ACCUMULATE. The MMs have kept price within this range ever since......going on six weeks now! What is very interesting.....consistent with "Buy low, sell high"......is considering price was dropped low to get it in this range (a "buy" signal?) and the range was last used for buying (a "buy" signal?) , we might easily jump to the conclusion this is a TIME TO BUY! But, is it?
Look closely and you will see that after the MMs dropped price into this historic range, the week with the highest activity was the week with the highest prices. The week with the lowest activity was last week with approximately the lowest prices. The current week is not finished. If we are to believe in "Buy low, sell high." then while PA was still up around the H&S pattern neckline, SM had placed more SELL orders down there, but AT THE HIGHER PRICES! The MMs, deciding when, moved the price lower to get to the SM SELL ORDERS. Now, SM was smart enough to pick that previous BUY range so it would be easier to lead the sheep to the slaughter by convincing them to now buy.....providing the MMs liquidity to fill the additional SELL orders of SM........HTHRW.
Having speculated on this, even if correctly, we cannot ever know how the MMs will move price next. However, it is also interesting to note, from PA in the first few months of this year, it can take as little as a single week for the MMs to move price to complete the H&S pattern.
And this would make nice profit INDEED for SM on the positions they built up at the neckline and within the current range. Will it happen? We cannot know. Seems a lot to transact in the few days of trading left in this year. But, PA might be taken down and ranged during the first several months of next year, just as with the first several months of the current year, giving good time for the MMs to create liquidity for SM to close shorts and flip.......AGAIN!