We’ve witnessed choppy price action across most major instruments during this week and the reason behind this type of price action is the increased level of uncertainty surrounding Europe, the United Kingdom and the US. With no tier-1 economic reports released over the past 4 days investors were not looking to make any major bets hence the lack of follow-through in most price swings.
We should expect a similar price action during today’s session even though there is a potential for a surprise depending on how the Euro-zone Finance Ministers’ meeting on Greece goes. We have little hope that any major decisions will be made today hence we shouldn’t expect any drastic changes but we should always be prepared for anything.
Yesterday the Single currency managed to pick up some more gains against the US Dollar and ended the day above the 1.0800 level. It might seem like there is a sense of optimism among traders about today’s FinMin meeting however a more careful analysis of the price action across all instruments will reveal that the climb was triggered from a short-covering attempt.
This means that traders preferred to close off some of their more aggressive pro-Dollar positions on the Euro ahead of the weekend allowing the likes of the Euro to move to the upside. Any sudden surprises in the form of a deal made today should drive the currency towards the 1.1000 level however we see limited chance for that.
A surprising performance from the Cable yesterday when the Retail Sales report was made public. The consumer report revealed that demand declined over the past month against expectations for a moderate rise but this didn’t seem to affect the Cable at all. The UK currency initially tried to break below the 1.5000 support floor but remained afloat and by the end of the day was trading between the 1.5000 and 1.5100 levels.
Quite a resilient reaction from the Cable that shows that traders are still backing the currency to do well in the short term. We still believe that the more medium term bias is pointing lower and based on the lack of any other UK-related reports we should see a further consolidation between 1.5000 and 1.5100 until the end of the trading week.
Economic Calendar
Recommended Content
Editors’ Picks
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.