Attention turns to the Pound today as markets remain unstable and volatile

Price action in the major instruments during the past 24 hours remained pretty much on the same tempo as on Monday with volatility elevated and a lot of changes in direction. It seems that investors are still on a waiting stance and don’t want to commit to fresh traders for the long term after the surprise miss on the US jobs report last week.

We believe that this is a natural reaction as the surprise miss would have investors adjusting their expectations on the majors instruments’ outlook hence their portfolios in order to tackle the uncertainty in the markets. At the same time the calendar didn’t offer any fresh news of any kind hence price action remained smooth.

Taking a look at the Euro first, the Single currency climbed back above the 1.1200 area yesterday completing another U-turn. The Euro has been rather unstable since the beginning of the month trading swinging higher and lower either side of the 1.1200 pivot area revealing that there is a lack of confidence from traders to back either currencies. With little expected developments during the upcoming session we expect a further continuation of this sideways pattern between the 1.1150 and 1.1250 levels.

Contrary to the Euro, the price action in the Cable has been more straight-forward during the last 24 hours with the UK currency trading higher against the Dollar and making its way to the 1.5250 area where we find it this morning. Again, unlike the Euro the Cable will have fresh news from the UK market today with the Manufacturing and Industrial Production levels pending for release.

The Cable has been oversold over the past 2 weeks and the current correction higher could be extended if the reports print in a bullish manner as expected, the 1.5300 and 1.5400 levels are the areas of focus to the upside. On the other hand, a miss on those reports would bring back the pressures on the UK currency and the Cable will be exposed to losses and a retreat to the 1.5100 area of support.