24 December Forex daily review
Tuesday was not unlike the previous trading day. Sluggish activity of market participants and more puzzled preparations for the celebration of Christmas led to minor fluctuations in key currency pairs. Macroeconomic releases just for a time brought some recovery.
By the end of trading Tuesday, the U.S. dollar rose against most currencies. Because of the small volume of trades in connection with holidays, the trading in the foreign exchange market was subdued. Many traders refrain from opening new positions.
The euro/dollar fell to 1.3655, but the calculated level 1.3625 is not reached. The market closed at 1.3675. British pound closed the European session strengthened against the dollar and euro. That growth of EURGBP cross rate was after the publication of strong data on mortgage lending in the UK, supported by pound’s buyers.
Reaction to American statistics was weak. Durable goods and new home sales went well above expectations. U.S. stock indices reacted with the growth, the Dow Jones and S&P 500 again reached historical highs.
On Wednesday is the holiday in the U.S., Canada, EU, UK, Switzerland, Australia and New Zealand. Exchange closed.
Before the New Year there are four trading days (26, 27, 30, 31). Many traders expect the market because of the holidays in a sideways trend will stay until January 2. We do not agree with this as volatility in the past few years suggests otherwise.
For example, in 2010 after the Christmas EURUSD growth was observed 3 figures and after the new year with the opening of the market fall within 3 days by 4 figures. In 2011, a similar pattern was observed. After Christmas, the euro/dollar fell by 3 figures and with the opening of the market in 2012, another drop by 3 figures was followed. In 2012 was flat in December, but in January 2013 for 3 days, the euro against the dollar has decreased by 3 figures.
Did you notice the variations in late December and early January? So we do not recommend to relax. If you decide not to trade on public holidays in the thin market, then rest is easy. Who does not have enough adrenaline, would be prepared for the fact that when Europe will rest on Thursday, U.S. thin market can accelerate major currencies up to 100-150 points. After the New Year low liquidity will be in the market, so until January 10 market traders can please their volatility and sharp price fluctuations.
|Forex Broker Spreads »|