Alpesh Patel
InvestingBetter.com
Price action in the currency markets was once again limited over the past 24 hours as we discussed in our previous report. This year there is a lack of any fundamental developments during the holidays’ season and this leads to traders staying out of the markets and benefiting from this low volatility to enjoy some away time. The Fed decision earlier this month was the last important development of the year and given that everybody knew pretty much what was going to happen there was little room for surprise.
We will keep monitoring the markets on a daily basis up until New Year’s Eve in order to keep you informed of any fresh news so we can start the new year strong but the low volume and lack of direction in almost all of the major instruments doesn’t offer too many opportunities. However we don’t expect a similar performance when traders start coming back to their desks, 2016 will be an interesting year and there will be plenty of issues to provide friction in the markets and create opportunities for us to take advantage of.
Yesterday the broader theme of the market was a mild Dollar rally against the Euro and the Pound but nothing too exciting, the British currency was the one that came under more pressure with the rate dropping below the 1.4900 support area. Overnight though the currency corrected back up to 1.4900 and we will need to see fresh lows below yesterday’s 1.4870 in order for the Cable to extend its decline. The economic calendar doesn’t offer too many news to drive momentum higher but the Consumer Confidence report later in the day might be a strong enough catalyst to apply some pressure.
The Euro was bearish as well yesterday but unlike the Pound it was able to remain above the 1.0950 support area. The Single currency is trading within a narrow sideways channel and a successful breakout from this formation could offer an opportunity for a short-term trade, our bias is to the downside and if momentum picks up pace we could be visiting the 1.0900 area. As we mentioned above the calendar is mostly empty but a surprise higher on the Consumer Confidence report from the US could prompt traders to sell the Euro against the Dollar.
Economic Calendar
Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts. The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.