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Commodity, Currency Markets Range Bound Due to U.S. Bank Holiday

By:
James Hyerczyk
Updated: Nov 11, 2015, 14:48 UTC

Today is a U.S. bank holiday, so volume is down in the commodity and foreign currency markets, leading to low volatility and limited price action. The

Commodity, Currency Markets Range Bound Due to U.S. Bank Holiday

EURUSD 2
Today is a U.S. bank holiday, so volume is down in the commodity and foreign currency markets, leading to low volatility and limited price action.

The EUR/USD attempted to breakout to the upside on technical buying, however, there wasn’t enough muscle to sustain the move, leading to a pullback into yesterday’s close. The lack of fresh economic news today is also contributing to the tight range.

Despite calls for a December rate hike by the Fed, the Euro may have reached a short-term bottom on Tuesday. The basis for this bottoming action is diminished hope of further stimulus by the European Central Bank.

Earlier in the month, short sellers took control of the market after ECB President Mario Draghi strongly suggested the central bank was ready to implement additional stimulus as well as a rate cut to help move the economy. This week’s price action suggests that there may be less pressure on the ECB to ease policy aggressively, as many were expecting, in December. In other words, Draghi let the threat of a rate hike by the Fed do the work for him.

Earlier today, Draghi gave a speech that offered nothing new for EUR/USD investors by refraining to comment on the possibility of increased stimulus in December.

The GBP/USD rallied on Wednesday, driven higher by a mixed bag of wage data and jobs numbers which at least did not worsen the broad economic outlook for the U.K. economy. The Average Earnings Index posted a 3.0% increase. Traders were looking for a reading of 3.2%. The Claimant Count Change was up 3.3K versus a 1.6K estimate. The unemployment rate fell slightly to 5.3% from 5.4%.

December Comex Gold prices remained range bound as investors waited for direction from the U.S. Dollar. Both markets are likely to remain in a sideways mode until Friday when the U.S. releases its latest data on retail sales.

December Crude Oil futures traded flat-to-lower. Volume is low ahead of tomorrow’s release of the weekly inventory report from the Energy Information Administration. Last night, industry group the American Petroleum Institute released a report which showed U.S. crude stocks jumped by 6.3 million barrels in the week ended November 6 to 486.1 million barrels. Traders were looking for an increase of only 1 million barrels.

The weekly EIA oil report will be released on Thursday instead of Wednesday. Because of today’s bank holiday, U.S. government agencies are closed. 

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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