The markets were eerily quiet yesterday, you could hear the tumbleweeds roll on through the major financial hubs as desks emptied out ahead of the holiday season. I expect reduced trading activity next week and the market to only get going again in January, and after a really tough 2016 you can’t begrudge traders from taking a breather.
In the market wrap I usually try to illustrate the highlights of the week and where markets may go in the upcoming week. To be completely honest, there were not many highlights last week and I am battling to see much happening in the upcoming week. Although the momentum was slightly reduced, the greenback was largely stronger against the pairs and only weaker against the JPY – after a prolonged assault on the JPY, this could be expected.
The EURUSD remains stuck between the 200 hour MA and the 100 hour MA, these levels come in at 1.0465 and 1.0420 respectively. This leaves the EUR mostly unchanged for the week, which is surprising considering the geopolitical factors that played out in Germany, Switzerland and again yesterday in Malta. None the less, we have a defined range and I would want this pair to break the range for me to take notice.
Cable was surprisingly active yesterday, at one point the pair was down 50 pips but recovered all of those losses before the day closed. The GBPUSD is still putting up a valiant fight and I am starting to wonder if the market is starting to get to grips with Brexit, there will be some volatility around any headline next year but hopefully we get back to normal market conditions in this pair.
The USDJPY had a good week as it made some inroads against the USD, it may have been because of the reduced liquidity but despite the moves I am still left a little bit disappointed in this pair. After such an extended run one would hope for a deeper correction, we close the week at 117.25 which is the 200 hour MA and this will be pivotal next week. My concern in this pair is that it has run out of a little steam, for this pair to have a nice correction it still has to break through some major support levels between 117.25 through 116.30 which could prove to be too tough.
The NZDUSD and AUDUSD both had a week to forget, both broke through their defined floors and this does not bode well for next week. Stay below the current levels in both pairs and we could be in some trouble next week.
Christmas is my favourite time of the year, everyone seems to be in a joyous mood and I get to see family that I don’t get to see on a frequent basis. It always seems to remind me of what is important in life and so the market will be the furthest thing from my mind for the next couple of days – as you often hear, that’s next week’s problem!!
For those celebrating this weekend – have a Merry Christmas!
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