If you were planning on quiet in the currency markets while traders awaited the coming weekend's G20 meeting, you've had reason to be frustrated.
"We've had some great volatility over the last couple of weeks," and statements from the G7 and others have only added to it, said Andrew Busch, publisher of AndrewBusch.com.
Much of the movement has been driven by official statements pointing in all manner of directions. There was the G7 statement endorsing market driven exchange rates, sending the yen lower; a follow-on from an unnamed official expressing concern about the yen's fall, sending it higher; comments from Swedish officials endorsing a strong krona, with predictable results; and most recently, a European Central Bank official voicing unease with a strong euro, which sent the common currency down.
"I know there will be more comments from politicians," Busch said, and he thinks the crosstalk is creating a great opportunity to sell the euro ahead of the meeting and book gains on investor uncertainty.
Busch wants to sell the euro against the dollar at 1.3500, setting a stop at 1.3550 and a target of 1.3350.
The timing of this trade is key, he warns. "Get this trade on before the weekend, before you get to G20, and then get this thing off."
Good luck out there.
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