Is Volatility About To Rise?
A new week in the fx-market
is upon us. A week in which we are not going to be troubled by
disturbing economic numbers let alone earthshaking speeches – so the fx-market
participants are in fact all alone on the fx-scene. Normally, a good indication
of sudden volatility to come.
Dollar-wise we are starting up on well-known
grounds as EUR/USD has not been able to re-conquer lost grounds above 122, which
is now considered tough resistance along with 122.50. To the downside 121.25 has
been able to fend off further downside attacks before the important 120-30-50
level.
Dollar index wise the break of 88.30 did trigger
a rally towards the 89 level, which, however, managed to defy further advances.
For now that is. I still reckon on the index to retest at least 89, maybe even
89.50, before an eventual retreat down towards 86 in the index. It is though
important to stress that should 89.50 be devastated, EUR/USD is on route for a
retest of at least 118.70.
Dollar wise we are on shaky
consolidation/correctional grounds right now that normally can be rather tricky
and not least costly. So patience is still needed before some real harsh action
is due. The commodity currencies like AUD and NZD have once again been leaders
of the dollar bull pack with a rather harsh sell-off in AUD paving the way.
Should 75-74.75 give way to the downside another sell-off could easily be
triggered. The same goes for NZD should 69 the figure been blown out of the
water.
So hold your horses before attempts of bottom
picking. Time might not be right now. We need the EUR/USD to stage a temporary
bottom before AUD and NZD will loose steam to the downside.
Lone Oleson is a Senior Forex Strategies for Jyske Bank
based in Denmark. Ms. Oleson is active Forex trader with nearly 20 years of
experience in currency futures.