Looking back over this past week, there were a few bright spots in terms of volatility but nothing definitive for trend. We are struggling for a common fundamental driver to deliver a consistent trend and follow through. We need risk trends. Yet, we are in between multi-year lows in volatility measures, a seasonal cooling of speculative activity into the end of the year and major threats to financial stability looming just beneath the surface. It is a mix that both suggests that risk trends will temper; but if they start moving, they can move far and fast.

The best bet in these types of markets is to find smaller swings to take advantage of the prevailing conditions (lack of trend but measurable volatility) and have orders should big, thematic risk trends take. I am perhaps going out on a limb by already taking on risk exposure.

In the trades I carry through to next week, two of them have out-right risk exposure. My top concern is my AUDUSD short from 1.0460 (stop:1.0530) as it is risk sensitive and will also experience high volatility with the RBA decision Tuesday. I may have to trail my stop before the release. My NZDUSD short from 0.8175 (stop:0.8320) is my biggest exposure notionally after widening my stop to cover the top of the longer-term wedge. This has still acted as a stalwart pair however and is more likely to hold off against positive risk trends.

Further away from the epicenter of risk, my GBPUSD short from 1.6025 (stop:1.6100) looks great technically within its desending trend channel and has far less risk exposure, but a breakout is inevitable next week. With a risk push, it may be bullish. Finally, my AUDCAD short from 1.0405 (stop:1.0455) isn't risk sensitive, but it is exposed to the RBA decision. Another one I may have to trail the stop on.

There are plenty of others that have great potential short there be a clear move towards of risk averison. On clear fundamental signs of market-wide fear or Euro trouble, EURUSD would look good holding 1.3000 and dropping back below 1.2825. AUDJPY is another extended pair and highly sensitive. Risk and RBA in mind, a 85 break would look good technically.

An alternative of 'risk on' is hard to justify fundamentally and there are few pairs with follow through potential (it's too difficult to support further risk taking). I like GBPJPY and CADJPY above resistance (132.50 and 83.50), but they also require more Japanese officials talking the yen down.

Then there are the non-standard, non-risk pairs. I still like USJDPY long either above 83 or from a 80.50 pullback. EURCHF is a one-sided pair when it gets back to 1.20000. Two others that I haven't paid much attention to this past week have also won my attention again: GBPNZD's three-month, descending wedge and GBPCAD cutting a tight and broader range of its own.

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