Silver: The 4H chart's Bollinger Bands appear to be tightening on this commodity as prices prepare for a volatile jump. With bearish crosses on the hourly and daily Slow Stochastic, as well as an over-bought indication on the 4-hour RSI, the next major movement may indeed be in a downward direction. Forex traders involved in commodity trading can take advantage of this knowledge by going short on Silver and riding out what appears to be building up to be a sharp movement in price. GBP/AUD: It appears as if the Bollinger Bands on the hourly chart have begun to tighten in expectation of a volatile movement. Most indications show the pair floating in neutral territory, which is common before a large jump. Signals are strongly in favor of a downward movement in the coming days and forex traders can benefit by riding out this momentum by placing early sell positions. The AUD/USD pair was traded within a restricted range over the past 3 weeks. However, it currently seems that the pair has the potential to breach through the range upper boundary. • The chart below is the AUD/USD 4-hour chart by ForexYard. • The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA [...] USD/MXN: After a volatile breach of the upper border of the Bollinger Bands on the hourly chart, this pair now appears positioned for a steady downward correction. Bouncing from the lower border to the upper border in the 4-hour Bollinger Bands supports this notion. Forex traders can also see that the price is currently floating in the over-bought territory on the 4-hour RSI, and a fresh bearish cross has recently formed on the 4-hour Stochastic (slow). Going short on the Dollar against the Mexican Peso in today's trading may not be a bad idea.

My favorite long term forex trade is short GBP/AUD. From both a technical and fundamental basis, the currency should be headed lower.

Based upon the recent trend of economic data including the highest level of unemployment in 12 years and the sharpest decline in retail sales since Feb 2009, the Bank of England should keep monetary policy easy for as long as possible. According to comments this morning, they seem to agree. BoE officials said their decision to leave their Quantitative Easing program unchanged was a close one - in fact some members actually favored increasing the program. Of all the major central banks, the BoE is the only one still considering more rather than less monetary stimulus and for that reason, the GBP should be headed lower. In fact, I think that the GBP will probably be the worst performing currency this quarter.

In contrast, the Reserve Bank of Australia intends to raise interest rates again in the near future. Last night’s comments from RBA Governor Battelino could not be more hawkish. He said the mining boom that is currently underway could last beyond 2020 and the boom is expected to lift investment and terms of trade more than in the past. He also believes that the growth potential of China and India suggests that the demand boom will also last longer. Therefore monetary policy needs to be extremely disciplined at this time because every past mining boom has fueled inflation. As a result, the rise in the Australian dollar is important because it helps to contain inflation. In other words, not only will the RBA raise interest rates again but they also want the Aussie to rise.

On a technical basis, moving averages are in perfect order meaning that the 10-day SMA is below the 20 which is below the 50 and 100. This usually foreshadows a new and major trend in a currency. On a shorter term basis, the GBPUSD is also trading deep within the Sell Zone territory according to my Bollinger Bands - all of which points to further losses: