Why You Should Expect Volatile Forex Markets

September 12, 2018

3 min

Table of contents

There is a flurry of major central bank activity set to rock forex markets this week. The forex markets are wound up ahead of this news and set to make big moves regardless the outcome. The first event is the monthly Beige Book report from the US FOMC, the second is an interest rate policy announcement from the BOE, and the third is another policy statement from the ECB. Together these statements will have far ranging impact on the EUR/USD, the GBP/USD and the EUR/GBP.
The Beige Book is expected to show continued economic expansion within the US. The data over the past month has been positive, there have been notable increases in labor conditions as well as activity within the manufacturing and services sectors. The data suggests economic activity is expanding in the second half and that is shown in the Atlanta Fed’s GDPNOw Tool. The tool shows an expectation US GDP will be in the range of 4.5%, 0.3% hotter than previously.
The EUR/USD is set to fall. The pair is trading and confirming resistance at the short-term moving average and 1.1625 resistance target. The indicators are bearish and suggest weakness within the market. The Beige Book, when it confirms this outlook, will also confirm the need for additional interest rate hikes and that will strengthen the dollar. A move lower may find support near 1.1300. The caveat of course is the ECB meeting. The ECB is not expected to change policy or even to make hawkish comments. If they surprise the market it could cap downward movement in the EUR/USD.
EUR/USD
The GBP/USD is trying to move higher off a recently set bottom but is having a hard time with resistance at 1.3050. The Beige Book could send the pair lower with the risk of BOE action. The BOE is not expected to raise rates, they just that at the last meeting, but they may sound hawkish in the statement. There have been positive developments in Brexit negotiations that are supporting the economy, outlook and the GBP/USD.
GBP/USD is trying to move higher of
A move up would be bullish if can close above 1.3050, a move lower may find support at the short-term moving average. A move below the EMA will be bearish.
The EUR/GBP is moving lower after reversing at a one-year high. The pair moved up to test resistance at the short-term moving average in early Wednesday trading and confirmed with an inverted hammer doji. The indicators are also bearish which adds further confirmation a move lower is to be expected.
EUR/GBP is moving lower
The ECB and BOE meetings may bring volatility but it will take serious surprises to get this pair moving higher again. The targets for support are 88.50 and 88.00 in the near-term.

What should you learn next? Turn the wheel to find out!

rainbow circle

How Not to Lose All Your Money

share

previous post

Market Overview: Big Winners and Epic Losers of 2024
Best assets of 2024
Market Overview: Big Winners and Epic Losers of 2024

next post

Bitcoin crash
Bitcoin Is Officially Dead. Or Is It?
Bitcoin Is Officially Dead. Or Is It?

Latest posts

Market Overview: Big Winners and Epic Losers of 2024

17.12.2024

Best assets of 2024

3 High-Impact Trading Strategies for Binary Options

06.12.2024

Best Binary Options Strategies

How To Short Sell Crypto: Making Profits in a Bear Market

25.11.2024

Short selling on the crypto market.

7 Habits That Define Winning Traders

23.11.2024

7 habits of winning traders

Black Friday, Christmas, New Year: Tips for Trading This Holiday Season

21.11.2024

Trading on Black Friday and holidays

3 Steps to Improve Your Trading Psychology

20.11.2024

trading psychology