- EUR/USD's ATM volatility has hit record lows and the S&P 50 VIX has dropped to seven-month lows.
- Volatility will likely spike if the US-China trade talks falter.
- The US personal and corporate spending numbers will take precedence over the Q3 GDP numbers.
EUR/USD's one-month ATM volatility, which measures the calculated or implied mid-rate volatility for an at-the-money (ATM) option for a specific expiration date, dropped to a record low of 4.012 on Tuesday.
The equity market volatility is also falling. The S&P 500 VIX, a measure of the stock market's expectation of volatility implied by S&P 500 index options, fell to 11.42 on Tuesday, the lowest level since April 17.
The drop in the uncertainty, as represented by the volatility gauges, could be associated with the recent developments suggesting the US and China are closer to resolving issues.
That said, an extended period of low volatility often paves the way for a big move on either side. The uncertainty will spike if the trade negotiations falter, possibly yielding a big drop in the common currency.
As for today, the focus is on the US data – Q3 GDP, Personal Spending (Oct), Durable Goods Orders (Oct), Weekly Jobless Claims.
The third-quarter annualized GDP is projected to be unchanged at 1.9%. The economy expanded 2% and 3.1% in the second and the first quarter, respectively.
The US slowdown has been priced in by markets and the focus will be on the Personal Spending and Corporate Spending (Durable Goods Orders) data. If these numbers blow past expectations, EUR/USD will likely suffer a convincing break below 1.10. The German import price index, due at 07:00 GMT, is unlikely to move the EUR pairs.
At press time, EUR/USD is trading in the red at 1.1013, having faced rejection at the descending (bearish) 5-day moving average at 1.1025.
|Today last price||1.1016|
|Today Daily Change||-0.0008|
|Today Daily Change %||-0.07|
|Today daily open||1.1024|
|Previous Daily High||1.1026|
|Previous Daily Low||1.1006|
|Previous Weekly High||1.1098|
|Previous Weekly Low||1.1014|
|Previous Monthly High||1.118|
|Previous Monthly Low||1.0879|
|Daily Fibonacci 38.2%||1.1018|
|Daily Fibonacci 61.8%||1.1014|
|Daily Pivot Point S1||1.1012|
|Daily Pivot Point S2||1.1|
|Daily Pivot Point S3||1.0993|
|Daily Pivot Point R1||1.1031|
|Daily Pivot Point R2||1.1038|
|Daily Pivot Point R3||1.105|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.