Friday, April 17, 2009

AUDJPY: Collapsing Bollinger

The range of price movements has been shrinking.

Or, as generally considered from a technical analysis point of view, the bollinger bands are collapsing.

Your guess is as good as mine as to the direction it will go, but usually when the bollinger bands collapse the currency will have completed it's consolidation and start a reasonable move up or down.

Given that it's a Friday I'd have to say be cautious. If people are nervous going into the weekend then they are likely to choose risk aversion, which is negative for carry trades.

My view... wait and see.

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