I was talking to Zoltan Vass (our Chief Economic Strategist) earlier this week and we were discussing how it appears we are on the verge of some very volatile activity. Looking at what the JPY pairs did this week really confirmed our expectations.

 
Now let me add to this that I think the old adage of 'We Ain't Seen Nothing Yet' is about to be confirmed. I can't say for certain it will be this coming week, but I am getting very organized to trade it if it is.

AUD/USD

I have been saying for weeks we should see one more push to the upside and then a reversal that; as Kevin O'Leary of BNN says 'Comes Down Without Hitting the Sides'. The price action on the chart shows how there has been a new top and now somewhat of a correction that has staled. I would surmise that there will still be one more move higher before the larger decline as the reversal was not sharp enough to really announce a top in place.

EUR/USD

Although not visibly in an ending diagonal, but going on almost the same premise, that because we have not rejected the new recent high in a very dramatic fashion we are likely still in the topping process and should see another 100 to 400 pip move higher to form a blow-off top. Remember what happened to the USD/CAD back in November when it dipped all the way down to .9000, the reversal from there was 1000 pips in just a few days. 

PS, look at your charts and see what the volatility was like in July and August of last year.

Pierre