How one can trade in a market where even central bankers are unable to assess the economic situation and the need for further measures? The answer is simple: It is best to not trade at all. At least, this might be the motto of the financial markets at the moment. Traders who had hoped for some profitable fluctuations following the ECB announcement have been disappointed, once again.
The new trend among policy makers is to just admit that they are uncertain about how the big themes including Brexit and other political turmoil will affect the global economy. European Central Bank president Draghi refrained from providing new insights as the central bank has no clear picture of the impact of Brexit. He admitted on Thursday that nobody can see what the consequences might be as policy makers have not enough data to evaluate the situation right now. The mood therefore remains skeptical. The next ECB meeting is on September 8 and it remains to be seen whether the central bank has a clearer picture until then.
Looking at the technical chart we would actually assume that the euro might be primed for an upside correction but given the uncertain market sentiment all predictions of further movements could be useless. We are therefore not going to refer to the technical picture today, as there is no clear trend within a low volatile market environment.
German and Eurozone PMI reports are scheduled for release at 7:30 and 8:00 UTC but these reports are not expected to have a significant impact on the euro.
The cable’s price development ended in a narrow trading range, formatting a symmetrical triangle in the hourly chart which may predict upcoming price breakouts. With prices above 1.3245 bullish engagements could be rewarding whereas a break below 1.32 could reinvigorate bearish momentum in the short-term. Market participants will focus on the U.K.PMI report due for release at 8:30 UTC.
Although the market doesn’t offer profit opportunities at the moment, we will stay on the ball and try to make the best out of the current market conditions.
Have a nice weekend.
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