This week, shortened by holidays in Hong Kong, Canada and the U.S. should not be taken lightly. Already, data releases from the U.K., Japan, the U.S. and EuroZone have proven that that low volumes often translate into high volatility. And it is not over yet! Still to come is EuroZone PPI, Retail Sales, the ECB rate decision, Australian Trade Balance as well as Jobless Claims and Employment Situation in the U.S. on Thursday. The big one is the ECB Rate announcement where most economists are looking for a 25 basis point cut. While that cut is largely figured to be built-in to the current Euro price, nothing should be taken for granted in these times and the technicals on Euro and Yen presage potential, if not likely volatility in the days and weeks ahead.
Oil prices continue to weigh down the dollar despite brief gains today in the U.S. ISM manufacturing report that came in higher than expectations. According to Michael Woolfolk, Senior FX Strategist at Bank of New York Mellon (a frequent guest on ForexTV.com) most of the manufacturing gains were "due to the building of inventories." Woolfolk continued saying that (the ISM) was "quite a negative report."
Crossing the wires at 6:00pm EDT Dow Jones is quoting an FX Strategist at BBH as saying there is a chance of a EURO sell-off after the ECB rate announcement if the pair does not hold the support level of 1.5720.
Comments