Another day of mixed performance from the Dollar and the rest of the major currencies of the FX universe and it looks as if traders prefer to take a moment and assess the outlook of the currencies before committing into any more repositioning. Moreover, with today’s holiday in the US trading participation and volume is expected to be reduced hence market participants prefer to remain on a neutral stance for the time being.
Yesterday the price action in the majors was rather volatile but within a set trading range with a few changes in direction. Early in the morning the Euro was in action when rumors that ECB could undertake unconventional measures to ease further sent the currency sharply lower to test the 1.0600 support. The Single currency printed a new low but later in the day it managed to recover and remain above this important support level.
The Cable was on a rather volatile ride trading between the 1.5050 and 1.5100 levels and bouncing between them a couple of times. There was little in terms of UK-related news in the calendar but the fresh data from the US printed in a mixed fashion driving the Pound and the rest of the majors into a volatile and directionless trading pattern. The bias still remains to the upside for the Dollar but we need to remain cautious as the US currency can attract so many traders before becoming too overbought to gain more ground.
Today we expect limited price action as there is the Thanksgiving holiday in the US and during the first part of the day the calendar offers little in terms of fresh news to spark some volatility. There’s always the chance that traders and speculators will try to take advantage of the thin trading volume and attempt to drive the major currency pairs into rallies but for that to take place a spark will be needed and we see no such opportunities coming up today.
The Euro is trading above the 1.0600 support area and with the bias remaining to the downside we could see another test of yesterday’s lows with the ultimate goal remaining around the 1.0520 area as ECB is poised to ease further. The Cable is holding above the 1.5100 level this morning and if it remains above this level we could see a further extension higher otherwise the UK currency will return to test the 1.5050 lows of yesterday.
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