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.

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
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.94%, while traders in Wall Street are at opposite extremes with 80.44%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WWeIIheTYs
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.16% 🇪🇺EUR: 0.09% 🇨🇦CAD: 0.08% 🇦🇺AUD: 0.03% 🇯🇵JPY: -0.05% 🇳🇿NZD: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/FLxOjdw4th
  • 🇯🇵 Leading Economic Index Final (DEC) Actual: 95.3 Expected: 94.9 Previous: 96.1 https://www.dailyfx.com/economic-calendar#2021-02-25
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.58% France 40: 0.54% FTSE 100: 0.39% Wall Street: 0.34% US 500: 0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/TDT69DjXeV
  • S&P 500 Rally May Lift Hang Seng, ASX 200 on Dovish Fed, 3rd US Vaccine. https://www.dailyfx.com/forex/market_alert/2021/02/25/SP-500-Rally-May-Lift-Hang-Seng-ASX-200-on-Dovish-Fed-3rd-US-Vaccine.html https://t.co/w22gDJEcXa
  • 🇯🇵 Coincident Index Final (DEC) Actual: 88.3 Expected: 87.8 Previous: 89.0 https://www.dailyfx.com/economic-calendar#2021-02-25
  • RT @FxWestwater: Crude Oil Price Forecast: Demand and Supply Drivers Firing on All Cylinders Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/02/25/Crude-Oil-Price-Forecast-Demand-and-Supply-Drivers-Firing-on-All-Cylinders.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/5…
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/YKS41u2Ptg
  • Risk appetite has spread heading into Thursday trade with more than just the SPX taking the lede. GameStop ($GME) is back in the top performance depth chart. What does this mean for trends ahead? My analysis: https://www.dailyfx.com/forex/video/daily_news_report/2021/02/25/GameStop-Commands-the-Speculative-Headlines-as-SP-500-and-Yen-Crosses-Rally.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/54seZPSCN0
  • Heads Up:🇯🇵 Coincident Index Final (DEC) due at 05:00 GMT (15min) Expected: 87.8 Previous: 89.0 https://www.dailyfx.com/economic-calendar#2021-02-25
EUR/USD, USD/JPY, GBP/USD Volatility Extreme Even for Holidays

EUR/USD, USD/JPY, GBP/USD Volatility Extreme Even for Holidays

John Kicklighter, Chief Strategist

Talking Points:

  • Volatility naturally deflates through year's end as holiday conditions curb market participation
  • The sudden slump in volatility in the past week relative to the past month has been particularly extreme for the Dollar
  • We use a 5-day to 20-day ratio to assess the change in activity levels from a historical perspective

See how retail traders are positioning in the majors using the DailyFX SSI readings on the sentiment page.

It comes as no surprise that volatility has collapsed into this final week of the year. The plunge in activity during this period is a reliable seasonal effect that can be shown on a statistical basis through metrics like the VIX and S&P 500 performance but is more often simply referred to through colloquialisms like the 'Santa Claus' rally. However, what is to say that the current deflation is justified rather than plunging levels of inactivity that are extreme even for holiday trade? Historical volatility measures are one means to assess current conditions, but we look at an easily accessible activity with an adjustment.

When looking at the relative volatility conditions, we have to take into consideration the 'holiday' conditions versus more 'normal' liquidity. Further, it is important to assess the general level of volatility through this year-end period compared to previous holiday conditions. To do this, I use a short-term average true range (ATR) and compare it to a medium-term duration. A five and twenty day period for those respective time frames approximate a trading week and trading month, which are appropriate comparisons. Not only does this show us extreme general levels of activity, it further reflects the degree of change which is a measure of intensity all its own.

Using this adapted measure, we can see that many markets are quiet; but the Dollar and its pairings are particularly extreme. The last five-days of trading activity has tumbled relative to the entire month of December to a degree that we haven't seen in years. For EUR/USD, that translates to the sharpest slide in volatility in five years. For GBP/USD, the slump has no equivalent until we go all the way back to 1994. For USD/JPY, the historical quiet and slide in activity matches tense technical pattern - a narrow wedge at the extreme end of a bull trend. While this coiled spring is unlikely to translate into major moves this week, it stages extremes that will rebalance when liquidity returns. How remarkable is the quiet in markets and what does it mean when depth fills back out in the New Year? We discuss that in today's Strategy Video.

To receive John’s analysis directly via email, please SIGN UP HERE

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

DISCLOSURES