Subscribe to RSS

Markets rattled with volatility with BoE rate decision ahead

The continued optimism over the increased likelihood that the Federal Reserve may raise US interest rates next week for the first time in almost 10 years has created an incredible level of volatility throughout the global markets. Erratic movements are being seen in the currency markets as eager investors systematically offload and reload positions in the hope of being on the right side of one of the most anticipated financial events of recent times ahead of the FOMC decision next week. While part of the excessive volatility in recent days could be contributed towards the milestone lows found in the price of oil and the under delivery from the ECB last week, there are concerns that the statement from the FOMC next week will be downbeat and reiterate that the pace of US rate rises from the Federal Reserve will be slow.

Moving back to the ECB under delivery last week, this has continued to install aggressive bullish momentum for the Euro currency and subsequently pushed the EURUSD to fresh weekly highs above 1.10. While this is an impressive bounce considering that we were looking towards 12-year lows at 1.05 just a week ago, the appreciation in the EURUSD still looks short-term with most market spectators being strictly bearish in the longer term and expecting the pair to remain under pressure.

When taking a look at the bigger picture and away from the exaggerated reaction to the ECB’s under delivery last week, expectations remain quite firm that the Fed is likely to raise US interest rates next week and this furthers the ongoing divergence in both monetary policy and economic sentiment between the two economies and consequently means that the EURUSD is still open to losses in the future.

EURUSD

Elsewhere, investors pulled down the Dollar for the second trading day and drove the currency to multi-week lows against the Euro and Yen as most investors firmed up and took profit on positions ahead of next week’s Fed policy meeting. Despite the short-term USD weakness, sentiment towards the Dollar remains bullish and with data in November fortifying optimism around a US interest rate hike in December as well as other central banks still threatening further easing, the Dollar can likely regain ground and appreciate once again in the future.

While the Dollar Index has declined to fresh levels not seen in weeks, technical traders might be monitoring the 200 daily SMA highlighted in the chart below as a possible opportunity, which may provide a foundation to encourage buyers to send prices higher.

DXY

The instability created from the ECB’s under delivery last Thursday has continued to weaken the USD and as a result, offered an opportunity for bullish investors to drive Gold prices to a weekly high at $1085. Regardless of the recent gains, this precious metal remains bearish and the rising optimism over the reinforced expectations around the Fed raising US interest rates next week should limit how high Gold can advance. There is still potential for Gold bears to install another round of selling momentum throughout metals and with the Fed Funds markets pricing in up to an 80% chance of a US interest rate rise next week, Gold remains vulnerable and open to more losses.

GBPUSD rebounds from 1.5000

The GBPUSD has experienced an aggressive appreciation to fresh weekly highs at 1.5190, which has been the result of temporary USD weakness and this has little to do with improved sentiment towards the Sterling.

The Sterling continues to receive regular punishment from the Bank of England’s (BoE) visible reluctance to begin raising UK interest rates, while other signs of slowing economic growth and stagnant inflation is also diluting any pressure on the BoE to act.

Later today investors will be awaiting the latest conclusion pf the monthly BoE meeting where the majority of onlookers are expecting interest rates to be left unchanged at 0.5%, which might be seen as a non-event for traders. Market participants will instead focus on the tone of the monetary policy summary for more clues on when the Central Bank may start raising UK interest rates, even though expectations have been pushed back beyond next year and more towards early 2017.

Despite the abrupt appreciation the GBPUSD has experienced in the previous trading session, the pair is still bearish and vulnerable to losses in my opinion. The lurking concerns over a potential slowdown in economic momentum for the UK economy mixed with strong expectations that the Fed may raise US interest rates next week holds the potential to encourage sellers to send the GBPUSD back down towards its recent lows at 1.49.

GBPUSD

AUDNZD

The AUDNZD is technically bearish on the daily timeframe. Prices are trading below the daily 20 SMA and the MACD has crossed to the downside. A breakdown below the 1.070 support may encourage sellers to send prices towards the next relevant support at 1.050.

AUDNZD

EURCAD

This pair is heavily bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has always crossed to the upside. The bullish momentum may send prices towards the next relevant resistance based at 1.5150.

EURCAD

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

100% Real Money CashBack Promotion 2017 – UFX

100% Real Money CashBack Promotion 2017 – UFX(0)

100% Real Money CashBack Promotion to all new and existing clients. Join and gain exclusive access to the ONLY online trading 100% Cashback rewards bonus program Link:  100% Real Money CashBack Promotion Link:  $50 Forex No Deposit Bonus Promotion Available to: All new trading account Ending Date: 31 December 2016 Bonus offer: 100% Real Money

50% Deposit Bonus and 10 USD Free Bonus – Hirose UK

50% Deposit Bonus and 10 USD Free Bonus – Hirose UK(0)

50% Deposit Bonus Campaign Maximum Bonus Amount is Unlimited for all customers And 10 USD No Deposit Bonus for Binary Options Campaign is available for new clients who open a Binary Option Account. It’s that simple. Link:  $10 Binary No Deposit Bonus Link:  50% Deposit Bonus Campaign Available to: All new traders Ending Date: 31

$2017 Forex No Deposit Exclusive Bonus – FreshForex

$2017 Forex No Deposit Exclusive Bonus – FreshForex(0)

$2017 HotNo Deposit Exclusive Bonus Offer to all new verified customers. The $2017 Forex No Deposit Bonus offers you a unique opportunity to test trading strategies of FreshForex Link:  $2017 Hot No Deposit Bonus offers Available to: All New Traders. Ending Date: 15 January 2017 Bonus Offer: $2017 Forex No Deposit Exclusive Bonus Offer to

100% Bonus Forex and Binary Options- MarketsYes

100% Bonus Forex and Binary Options- MarketsYes(0)

100% Holiday Cheer Deposit Bonus 2016 Forex / CFD and Binary Options to all New Traders. MarketsYes is glad to offer prospective clients for every deposit up to 1000 USD/EUR/GBP a 100% Holiday Cheer Deposit Bonus Link: 100% Holiday Cheer Deposit Bonus 2016 Link:  $25 Free Bonus Forex / CFD & Binary Options Available to:

$10 Binary Options No Deposit Bonus – Hirose UK

$10 Binary Options No Deposit Bonus – Hirose UK(0)

$10 Binary Options Free No Deposit Bonus Campaign is available for new clients who open a Binary Option Account. It’s that simple. Link: $10 Free No Deposit Bonus Link: 50% First Deposit Bonus Available to: All new Binary Option Account Validity Date: 31 December 2017 Bonus Offer: $10 Binary Options Free No Deposit Bonus Campaign

$30 Free Bonus Plus 30% Deposit Bonus – Ayrex

$30 Free Bonus Plus 30% Deposit Bonus – Ayrex(0)

$30 Binary Options No Deposit Bonus to all New activated Clients. Ayrex presents its very first Binary Options No Deposit Bonus for new traders. Sign up to get FREE $30 and turn them into a fully withdrawable $200! This bonus allows you to profit without making an investment and trade binary options risk-free. Link:  $30

$50 Forex No Deposit Bonus Exclusive Offer – FortFS

$50 Forex No Deposit Bonus Exclusive Offer – FortFS(0)

$50 Forex No Deposit Bonus Exclusive Offer to New and Existing Traders. The $50 Forex No Deposit Welcome Bonus can be received within the promotional time period, from 28.11.2016 to 07.12.2016 inclusive. Link:  $50 Forex No Deposit Welcome Bonus Link:  Up to 50% Bonus of Every Deposit Link:  15% Support Margin Bonus Available to: New

$25 Countdown Forex Bonus Promotion 2017 – ForexTime

$25 Countdown Forex Bonus Promotion 2017 – ForexTime(0)

$25 Countdown Forex Bonus Promotion 2017 new and existing will be eligible traders. ForexTime is offering by receive a $25 credit bonus when they make a deposit of $300 into their accounts*. Link:  $25 Countdown Credit Bonus 2017 Link:  Loyalty Cashback Promotions Link:  $4 Cashback back for every lot Ending Date: 31 December 2016 Available

100% US NFP Bonus Promotion December 2016 – Xtrade

100% US NFP Bonus Promotion December 2016 – Xtrade(0)

Up to 100% Deposit Bonus Promotion to All New and Existing Customers. December 2016 US NFP Announcement Deposit NOW $1000 to $5000 and receive 100% bonus! Link:  $50 No Deposit Bonus Promotion Link: 100% Deposit Bonus Promotion Link:  Free Flight Tickets to Madrid Available to: All New and Existing Customers Bonus Ending Date: Valid 01/12

100% Welcome Bonus Plus Risk Free Trade – Trade12

100% Welcome Bonus Plus Risk Free Trade – Trade12(0)

Get 100% Welcome Deposit Bonus and 7-day risk free trade, Boost your trading with a free 100% Welcome Deposit Bonus to your Live Trading Account. Link:  Get 100% Welcome Bonus Link: 50% Exclusive Deposit Bonus Available to: All new clients Ending Date: 31 December 2016 Bonus Offer: Get 100% Welcome Deposit Bonus Plus 7-day risk

read more

Forex Featured Broker

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories