Quiet trading after the US holiday but there are opportunities out there

Price action in the major currency markets over the past 24 hours has been extremely limited due to the Thanksgiving holiday in the US and the lack of any important news or reports from Europe. As such we have little in terms of fresh news and developments to discuss this morning as the market remains in the same state we left it yesterday.

Today we should see increased volume and participation compared to yesterday as traders will return to their desks but given that it’s a Friday and there’s not a lot of reports scheduled for release or other important developments taking place today we shouldn’t expect too much. However this is not to mean that there will be no opportunities to trade, especially the Pound as the release of the GDP levels will spark some volatility.

The main bias remains in favor of the US Dollar as the Euro is facing yet another round of easing pretty soon, even though recent reports from Europe painted a better looking picture and allowed the Single currency to correct a bit and trade above the 1.0600 level during the past couple of days. At the same time, the Pound remains weak against the US currency as well, recent comments from BoE policymakers have limited its outlook and even though the Cable has found some temporary support around the 1.5100 level the next short-term target comes around the 1.5000 area.

Taking a look at the recent price action, the Euro remained flat yesterday throughout the day trading slightly above the 1.0600 area. The lack of trading volume the past 2 days has allowed the Euro to build a base above the 1.0600 level but that should not make us forget that the sentiment remains bearish. Any corrections higher or any rallies to the upside should be treated as opportunities to sell at a higher price since the bias remains negative and the next target to the downside lies around the 1.0520 area.

The Cable traded sideways for the past couple of days edging either side of the 1.5100 level, it has been the lack of participation and any important news that has allowed the Pound to remain afloat against the Dollar after the hefty drop from the 1.5300 area. The outlook for the Pound remains negative as well, the BoE will be the next bank after the Fed to raise hike but for now they’re concerned about the low inflation. Today’s GDP report should spark some volatility but don’t expect too much as it rarely misses analysts’ expectations.