For all the negativity in the markets last week, such as possible recessions, inverted yield curves, worsening of trade wars, protests in Hong Kong, and the results of the primary elections in Argentina, major USD fx pairs have been in relatively tight ranges.  Below are the ranges of some of some major currency pairs for last week: 

Majors

Source: FOREX.com

These tight ranges were despite Fixed Income screaming higher, and stocks and gold moving lower.

This week begins in similar fashion for USD pairs, with minimal movement in the aforementioned pairs.  So what is it going to take to get volatility back into these pairs?

We may have to wait until later in the week to find out.  On Thursday, PMIs are due out, and on Friday, Fed Chair Powell is due to speak at the Jackson Hole symposium.  These events could spark volatility in the USD major FX pairs.   

PMI stands for Purchasing Managers Index.  A reading above 50 is considered to show economic expansion, and a reading below 50 is considered to show economic contraction.  The expectation for Germany is 43.0.  This is already is low expectation, and any actual reading worse than this could send the Euro aggressively lower.  Expectations for the Eurozone as a whole is 46.3 (although the German number is more closely watched), and expectation for the US is 50.5.

Chairman Powell is speaking at 10:00am EST on Friday at the Jackson Hole symposium.  Although we’ll get a glimpse into the Fed’s thinking on Wednesday when the FOMC meeting minutes are released, the minutes are backward looking. Therefore, it will be more important what Powell has to say on Friday regarding the Fed’s current outlook.   There are many answers the market will be looking for out of Powell on Friday:  Is the Fed worried about an inverted yield curve?  How worried is the Fed regarding the US-China trade war?  How concerned is the Fed about a global manufacturing slowdown?  If Powell’s comments are more dovish, the US dollar may move lower.

Regardless of the direction of the currency pairs, we may have to wait until Thursday and Friday to see the volatility.

The information within this website has been prepared and issued by Talking Forex on the basis of publicly available information and other sources believed to be reliable. Whilst all reasonable care is taken to ensure that the facts stated are accurate, neither Talking Forex nor any director, officer or employee shall in any way be responsible for its contents. This document is intended to provide clients with information and should not be construed as an offer or solicitation to buy or sell securities.You may cancel your service at any time, just contact us from the FAQ/support page quoting your registration email address and we will cancel your subscription as of the next billing cycle or refund your trial deposit.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD remains stuck in a narrowing price range after Fed

EUR/USD's struggle for strong directional bias continues after hawkish Federal Reserve (Fed) rate cut. The risks in EUR/USD looks skewed to the downside ahead of Eurozone data and ECB-speak.

EUR/USD News

GBP/USD remains below 100-day SMA on "Super Thursday"

With the mixed Brexit headlines and the US Dollar pullback playing contrasting tunes, the GBP/USD pair remains under 100-day SMA while heading into the London open. All eyes on UK Retail Sales, BOE decision.

GBP/USD News

USD/JPY keeps losses below 108.00 as BOJ disappoints the doves

USD/JPY keeps the losses below 108.00, as the Japanese Yen remains on the front foot in reaction to the Bank of Japan's (BOJ) status-quo that came in as a disappointment for the doves. 

USD/JPY News

Bitcoin dives below $10,000

Bitcoin has lost its cool towards the end of the Asian session on Thursday. After managing to defend $10,000 over the last few days, the granddaddy of cryptos has plunged below several other support areas including $9,900 and $9,800. 

Read more

Gold: Indecisive market, focus on today's close

Gold is currently trading at $1,480 per Oz, representing 0.21% drop on the day. On Wednesday, the yellow metal witnessed two-way business before ending the day with moderate losses at $1,494.

Gold News

Forex Majors

Cryptocurrencies

Signatures