It is a holiday in most parts of the world and hence the consolidation is expected to continue
It is yet another day of slow trading and consolidation and ranging that we are looking forward to for today, for a variety of reasons. It is the first day of the week and the first day of the month and generally, the volatility and the liquidity is very slow during such times and hence, we would not be surprised if we see more of the same today.
Also, it is a holiday in many parts of the world for today as well, as a follow up for the Easter Sunday and hence, this is only going to lead to even more consolidation and slow trading for the rest of the day. It is especially true for a pair like EURUSD which has been trading within a 250 pip range over the last couple of months with the momentum clearly lacking in either direction. We are not sure which among the bulls and the bears would emerge successful when a breakout, if and when it happens, is on the horizon as we have seen the pair move to either side of the range over the past month.
There are many fundamental, technical and geopolitical factors in play and this is making it very difficult for the traders to judge the direction of the euro and the dollar as well. The dollar was expected to be on the ascendancy over the last month but that has not happened due to the geopolitical issues that have been caused by the decisions of the US government. So what we have left is some choppy trading over the last few weeks making the life of long term investors quite difficult.
Looking ahead to the rest of the day, as we have mentioned before, we do not expect too much of liquidity or volatility in the pair for today as the action is expected to pick up from tomorrow.
Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.