Today I will be quickly going through few pairs. Most were expecting another volatile session as we saw on Monday; but found the markets to be quite smooth comparatively. Still caution advise as if the stocks end up getting sold again; we can see some wild swings again and especially on the JPY.
I’m sure wherever you go; you have been hearing the same thing. Blood on the floor; total carnage; what was that; this is madness; OMG; who is behind all this; is this for real and my personal favorite and I thought I have seen all sort of market conditions but I found out today, I was wrong.
Was it the Dollar weakness; or was it the crash on the stock market or was it Yen who was the culprit. Were there any usual suspects behind it, hedge funds / CB or perhaps Aliens.
The past week was all about RISK OFF on the USD; with US DOLLAR and the Stocks were sold out at will. SPX dropped almost 140 USD with the last 2 days of trading alone saw a 100 USD dip.
There are a number of factor that contributed towards the volatility but namely so; it all began with dovish FOMC and while markets were gearing up for a very likely September rate hike by the Fed’s; FOMC suggested it can be delayed out. This anticipation of rate hikes been going on for a while now; with original expectations were to see the hike done in June.
GBPUSD is likely to come across an important resistance around to the 5740 level and a break higher can put an end to the lackluster move it is having past few weeks. It opens up the run for a 59XX; however a hold to the mentioned resistance and a deeper drop can be seen making it’s way to 5420-3X zone.
While the most waited news event for Wednesday was the FOMC; it came dovish with yet no sign of any hike to be seen anytime soon; causing the US Dollar to lose footing and was sold out pretty much against the majors.
There could be some volatility to be seen in coming days on the USD majors; hence we are opting to try major crosses for they likely to carry minimum affect incase USD trades heavily on Thursday and Friday.