The major pairs in the Forex market seemed to be uncharacteristically subdued from the end of last week until the first few days of this week. Towards the end of last week, it appeared as though volatility may be picking up and we would see a lot of good two trading this week but that did not happen early on in the week. The EUR/USD came out flat and traded in roughly a 120 pip range for the first part of the week. This is fine for traders that trade on shorter time frames but it can be very frustrating for traders that trade based upon daily charts. When the low to high price range is very tight the price action never really moves far enough in a given direction to make a decent profit before turning around and moving in the other direction while still not moving far enough to accomplish much in the new direction before turning around again. It can seem like you’re chasing your own tail when this occurs and it can be quite frustrating.
The big newsmaker early in the week either centered on the US/China trade deal or Brexit depending upon who you listen to. Over the weekend reports came out of the G20 summit that the US and China had reached a tentative agreement around avoiding a major trade war which sent the stock market soaring. Overnight Monday into Tuesday President Trump sent out messages that stated he was not sure if the deal would actually come together and China was not saying anything, based upon this development the stock market moved sharply lower erasing the previous day’s gains and more leaving the US market reeling with losses spilling over into international markets. The interesting thing about this is that the market was flat to down in early trading when just after 12:00 pm US EDT news came out of the UK around Brexit trouble, it is right after that that the US market took its most severe dive. It is possible that the early tariff news created downward pressure and the added Brexit news made the bottom fall out. Thursday morning reports came out from both China and the US that China hopes to comply with US demands around trade and they want to put a timeframe in place and cooperate. If the movement early in the week was caused solely by tariff news it seems as though it would have moved sharply higher based upon this new news but that was not the case, in fact, the stock market ultimately continued to fall further.
The EUR/USD did finally see some direction in an upward move that was the first move of the week that looked even close to being substantial. The JPY gained against the EUR and the GBP while USD made a small move against GPB that was easily erased as the week went on. USD has had mixed result against other major currencies but it did punish the AUD this week getting back to where it was over a month ago. After taking a beating a from the AUD for the past few months the EUR also made a strong move going sharply higher bumping up against highs from a month ago. The CAD made a strong move on Friday based on the oil output news from OPEC erasing early losses. Hopefully next week we will see the nice rolling price action that was expected this week.
About Bill Poulos
Bill Poulos is the president and co-founder of Profits Run, Inc. The company offers training through books, online courses, coaching, and trading software to help guide traders in the markets. Poulos publishes books and articles to keep his clients up to date on current economic trends. Profits Run and Bill Poulos launched a website to help inspire young people to be successful. He and his wife, Karen, find joy in giving back to the community. They reside in Wixom, Michigan where Profits Run is headquartered.