Forex Volatility Almost Guaranteed on Huge Week for Currencies
- Smallest Euro/US Dollar monthly range in six years underlines recent forex market indecision
- Huge week with FIVE central bank rate decisions promises a major break in summer lull
- Critical US Nonfarm Payrolls report could determine Dollar trends through year-end
The Dow Jones FXCM Dollar Index finished the month of August almost exactly where it started, but a critical week for forex markets almost guarantees that the Greenback will see much larger moves in days and weeks ahead.
The Euro was a bottom performer this past week, and erased nearly all of its monthly gains against the US Dollar over the final four days of trading in August. What will an ECB-laden first week of September bring for the single currency?
Rather than following the traditional economic measures – even heavy hitting themes like the BoJ rate decision and tax debate – yen traders need to watch the ebb and flow of risk appetite as the market grows more critical of historically low carry yield.
A key Bank of England (BoE) interest rate decision may help the British Pound maintain its bullish momentum versus the suddenly-resurgent US Dollar on improved outlook for the domestic economy.
Though gold slipped this past week, the precious metal is still supporting its bull trend. This drive back to $1,400, however, may come into trouble as the NFPs revive speculation in the Fed’s September Taper time frame.
The Australian Dollar may finally find fuel for a bounce in the RBA interest rate decision but US news-flow and Fed “taper” speculation may complicate matters.
Use the DailyFX-Plus Technical Analyzer to identify possible trade setups.
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