Gold - revert to mean with 1:2 RR, H4Gold short positioning getting stretched -> short squeeze
Stronger US inflation failed to lift USD -> inflation growth, Fed policy priced in
Revertion
FX CHART OF THE DAY: GBPUSD MEAN REVERTION UPWARDSGBPUSD has slightly fell outiside 1st standard deviation from weekly (120-h) mean, however amid strongly compressing volatility (measured by 3.2 st deviations from the weekly mean), indicating more probability to revert upwards to the mean than continue falling.
Traders can take long positions at re-tag of the 1st standard deviation from outside at 1.5160 - towards the mean, with stop below relevant lows at 1.5130
Target is +50 pips form the 1st st deviation toward the mean at 1.5210.
Breakeven cut off time is in 8 hours - after that trade should be put to breakeven asap if it is still open
Traders must also consider important UK news coming out 9-30 UTC
FX CHART OF THE DAY: USDJPY MEAN REVERTION TRADEUSDJPY is breaking back into the 1st st deviation from weekly mean amid compressing volatility (measured by 3.2 st deviations from weekly mean), siting high probability to reach the mean itself @ 120
Traders can take long positions at the lower 1st standard deviation @ 119.625 with stops below relevant lows @ 119.17
Traders should also mind JP news coming out 0:30 UTC
MACRO VIEW: GAZPROM MEAN REVERTION TRADINGSince about 2013 Gazprom trades laterally in relation to 1-year mean, giving abundant opportunity to take mean revertion trades.
Mean revertion trade is when price goes from either 1st standard deviation from the mean to the mean itself
On the chart I have pointed out such opportunities in the past (blue arrow is approximate entry towards the mean, highlighted in red)
Currently Gazprom sits at the 1-year mean - so traders can pick a mean revertion next time it trades to either higher or lower 1st standard deviation!
FX CHART OF THE DAY: GBPUSD MEAN REVERTION DOWNWARDS TRADEGBPUSD is on risk of mean revertion downwards trade.
Price is tagging upper 1st standard deviation from weekly (120-h) mean) from inside amid compressing volatility (measured by 3.2 standard deviations)
Traders can take short positions at the 1st standard deviation (1.5450) with stop above relevant highs (1.5485) and targeting the weekly mean (now at 1.5365)
There are no major news incoming on Monday, so no extra volatility is expected...
FX CHART OF THE DAY: USDCAD MEAN REVERTION DOWN TRADEUSDCAD is trading laterally recently around its weekly mean.
Currently price is again at its relevant range upper border, marked by 1st standard deviation from weekly (120-h) mean. Volatility is compressing, hinting us that another mean revertion is likely in the cards (downwards this time)
Traders can pick shorts close to the upper 1st standard deviation (1.3285) targeting the weekly mean (at 1.3225).
Stops should be places above relevant highs - at 1.3335
FX CHART OF THE DAY: EUR LIKELY TO REVERT UP TO ITS MEANAfter a sharp up move earlier this week EURUSD has retraced its gains significantly.
However it did not yet enter a downtrend on weekly basis - price is returning to its 1st standard deviation from weekly (120-h) mean amid compressing volatility (marked by 3.2 st deviations from the mean)
Thus the price is likely to revert up to the weekly mean within a day or two
Traders can pick long positions close to lower 1st st deviation from weekly mean (1.1270) with stops below relevant lows (at 1.1190) and target the mean (at 1.1410)
Traders also should mind calendar events coming out on FRIDAY!=)
FX CHART OF THE DAY: MEAN REVERTION UPWARDS PROBABLE USDJPYUSDJPY reentered 1st standard deviation from weekly (120-h) mean after a sharp drop earlier this week
In my previous chart I also mentioned that USDJPY held long term levels (see related)
Price is now likely to tag the weekly mean, as it moves into usual lateral range
USDJPY is also supported by BOJ, continuing its extensive monetary stimulus
Traders can take long positions close to the lower 1st standard deviation (118.70) targeting the mean (121.00) - with stop below recent lows (118.20)
FX CHART OF THE DAY: USDJPY MEAN REVERION DOWN PROBABILITYUSDJPY is breaking below the 1st standard deviation from weekly (120-hour) mean after a leg of uptrending move.
Price is likely to tag the mean before continuing further - to recharge volatilty.
Traders can pick shorts close to the upper 1st standard deviation (124.70) aiming to the mean (124.30)
Stops should be placed above relevant highs (125.10), tagging of which will confirm another leg of uptrend.
FX CHART OF THE DAY: USDSEK MEAN REVERTION DOWN RISKUSDSEK is breaking through the 1st standard deviation from weekly (120-h) mean after a leg of uptrend from above.
Price is likely to revert to is weekly mean for volatility recharge before going further.
Traders can pick shorts around the upper first st deviation (at 8.70) and with target at the mean (8.65). Stops should be placed above relevant highs (at 8.76)
FX CHART OF THE DAY: USDRUB MEAN REVERTION DOWN PROBABILITYUSDRUB is tagging upper 1st st deviation from weekly (120-hour) mean after several legs of uptrend.
The price has a probability of mean revertion downwards to recharge volatility before going further
Traders can pick up shorts at the 1st standard deviation (62.64) with stops above the relevant peaks (64.55) and target at the weekly mean (60.65)
FX CHART OF THE DAY: GBP MEAN REVERTION DOWNWARDS IN PROGRESSGBP has recently broke down inside the 1st st deviation from weekly (120-hour) mean.
There is high chance of price tagging the mean now amid compressing volatility.
Traders can catch up with it by shorting (preferably closer to the 1st st deviation @ 1.5635) in view of price falling to its weekly (120-hour) mean @ 1.5595
However traders willing to jump into the move should also put a stop above the relevant highs (@ 1.5680), despite the fact that the stop level is far away upwards from the price.
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Please mind volatile calendar news due today on the pair: at 8-30 and 14-00 GMT!
FX CHART OF THE DAY: USDNOK RANGEBOUND TRADINGUSDNOK has been trading laterally for some time now and no sits right on its weekly (120-h) mean. Volatility (measured by 3.2 st deviations) is compressing and there is no apparent slope of the mean.
As there are no significant news (calendar events) coming out on the USDNOK today. traders can pick trades both ways, betting that the price will keep reverting to the mean from its 1st standard deviation
Each new approach to the border of the lateral range is a risk of breakout/breakdown, so traders should not forget putting their stops close to relevant peaks/lows.
