News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/wHotmlkaor
  • 🇬🇧 Nationwide Housing Prices YoY (JUL) Actual: 10.5% Expected: 12.1% Previous: 13.4% https://www.dailyfx.com/economic-calendar#2021-07-28
  • 🇩🇪 GfK Consumer Confidence (AUG) Actual: -0.3 Expected: 1 Previous: -0.3 https://www.dailyfx.com/economic-calendar#2021-07-28
  • Heads Up:🇬🇧 Nationwide Housing Prices YoY (JUL) due at 06:00 GMT (15min) Expected: 12.1% Previous: 13.4% https://www.dailyfx.com/economic-calendar#2021-07-28
  • Heads Up:🇩🇪 GfK Consumer Confidence (AUG) due at 06:00 GMT (15min) Expected: 1 Previous: -0.3 https://www.dailyfx.com/economic-calendar#2021-07-28
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/Vi2PMPsqg2
  • (Sentiment Weekly) S&P 500, Dow Jones Forecast: Retail Investors Intensify Bearish Exposure, Now What? *And recording of today's webinar in the article link below! #SP500 #DowJones https://www.dailyfx.com/forex/technical/article/special_report/2021/07/28/SP-500-Dow-Jones-Forecast-Retail-Investors-Intensify-Bearish-Exposure-Now-What.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/p5UmFwBTsg
  • 🇯🇵 Coincident Index Final (MAY) Actual: 92.1 Previous: 95.3 https://www.dailyfx.com/economic-calendar#2021-07-28
  • 🇯🇵 Leading Economic Index Final (MAY) Actual: 102.6 Previous: 103.8 https://www.dailyfx.com/economic-calendar#2021-07-28
  • Heads Up:🇯🇵 Leading Economic Index Final (MAY) due at 05:00 GMT (15min) Previous: 103.8 https://www.dailyfx.com/economic-calendar#2021-07-28
GBP/USD, AUD/USD Expected to be Most Volatile Currencies Next Week

GBP/USD, AUD/USD Expected to be Most Volatile Currencies Next Week

Justin McQueen, Analyst

Currency Volatility GBP/USD,AUD/USD Talking Points

  • Pound posts worst week since August vs USD
  • Money markets price in further RBA rate cuts

Top 10 most volatile currency pairs and how to trade them

GBP/USD, AUD/USD Expected to be Most Volatile Currencies Next Week

GBP/USD | Weekly Range 1.2150-1.2425

As the political limbo continues within the UK, implied volatility in the Pound remains elevated relative to its counterparts (albeit this has eased in recent weeks). Earlier in the week, Boris Johnson had been dealt yet another blow to his authority after the Supreme Court ruled that the Prime Minister’s suspension of parliament had been unlawful, which in turn has seen MPs recalled back to parliament. While there is a plethora of UK data in the upcoming week, investors will largely be on Brexit watch, which will provide much of the volatility in the Pound and given the continued uncertainty, the currency will remain in the crossfire.

GBP/USD, AUD/USD Expected to be Most Volatile Currencies Next Week

Source: DailyFX

In regard to a directional bias, risk reversals continue to show a marginal premium of puts over calls, thus suggesting that downside in the currency remains. As a reminder, the Pound is set to mark its largest weekly loss since the beginning of August vs the USD. That said, what is a risk the currency is whether the government is able to circumvent the Benn Act (forces the PM to ask for an A50 extension if no-deal is reached by October 19th), given that it will raise the imminent risk of a no-deal Brexit.

UK Government options being considered to deliver Brexit by Oct 31:

1) Pass ‘Order of Council’ to suspend Benn Act until after Oct 31

2) Invoke EU law circumventing parliamentary legislation

3) Suspend Benn Act using Part II of Civil Contingencies Act 2004

GBP/USD ATM break-even straddles = 123pips(meaning that for option traders to realise gains, the spot price must see a move greater than 123pips).

AUD/USD | Weekly Range 0.6690-0.6830

October RBA Meeting is a Live Meeting

In light of the most recent labour market report, expectations for a rate cut by the RBA had surged, making October a live meeting. That said, the RBA Governor had failed to provide a clear signal that the RBA would move at the upcoming meeting, thus given that money markets are pricing in a 78% chance of a cut, a decision to stand pat would likely spark a notable uptick in the Australian Dollar, something the RBA have been looking to avoid. That said, given that the labour market has shown little signs of improving and with the continued uncertainty regarding US-China trade tensions weighing on global growth, it is somewhat increasingly difficult to argue against further rate reductions.

AUD/USD ATM break-even straddles = 55pips.

GBP/USD, AUD/USD Expected to be Most Volatile Currencies Next Week

For a more in-depth analysis on FX, check out the FX Forecast

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES