Low Volatility Fails To Provide Profitable Environment For Traders

Dear Traders,

There was little movement in the finical markets with the euro and British pound being uninfluenced by any hawkish Fed speak and U.S. economic data. Despite hawkish comments from Atlanta Fed President Dennis Lockhart and San Francisco President John Williams saying that recent economic data may justify additional policy tightening there was no appetite for U.S. dollars. Neither did weaker U.S. existing home sales numbers affect the greenback negatively.

Volatility has been very high during the last two weeks and many investors and day traders have locked up a good profit which is why many investors prematurely went on vacation or now refrain from taking any positions ahead of the Easter holidays. This week we expect volatility to remain moderate with traded volumes being subdued. Traders should therefore not expect too much and take profits at smaller targets.

The EUR/USD refrained from trading below the 1.1230-level but does not seem to favor the upward trend, either. A current resistance is seen at 1.1285, whereas short-traders should pay close attention to a break of the 1.1220-1.12 support. The German IFO and ZEW surveys are due for release today and forecasts point to an increased confidence. Positive numbers may lend support to the euro’s bullish bias.

Trading the GBP/USD yesterday has offered us nothing but losses. The cable marked a recent support at around 1.4360 whereas upward movements were limited until 1.4430. We see next important support levels at 1.4335 and 1.4310 which have to be breached in order to reinvigorate fresh bearish momentum. U.K. Consumer Prices are due for release at 9:30 GMT and if data provides a positive surprise we could see sterling strengthening towards 1.4450 and 1.45.

9:00 EUR German IFO Business Climate

9:30 UK Consumer Prices

10:00 EUR German ZEW Survey

13:45 USA Markit Manufacturing PMI 

(Time zone GMT)

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