Currency market review January 16, 2020
What do we see in the market?
The dollar 🇺🇸 index managed to bounce up from the strong support level of 96.00, thereby indicating to investors the relevance of the global upward trend in the foreign exchange market.
But with respect to individual currencies, the dollar is trading in different directions and after a medium-term reversal, prices from global support force buyers are gradually dying away.
Within the current week, active attempts to consolidate the price above subsequent resistance levels are not observed.
Trading takes place as part of a sluggish consolidation, notable for the fact that the downward impulses are accompanied by greater volatility and increased volume.
It should be emphasized that the dynamics relative to individual currency pairs varies. However, active driver purchases are not enough.
Buyers managed to resist the decline in the price of European 🇪🇺 currency, which we witnessed last week, however, the growth impulse, even more so, is modest and uncertain.
The price is growing quietly without a significant increase in volumes, and the volatility of the previous decline was many times higher.
Nevertheless, the trade turned above important support levels, but below a key area of resistance.
It is likely that the market has reached parity of the dominant forces in the market and significant drivers are expected to emerge, which will determine the future fate of the euro quotes.
These drivers are likely to be macroeconomic data from America, as the news background on the euro has traditionally no longer been influential, due to the predictability and conservative views of the ECB.
The mood of the market is controversial. It is too early to judge long-term trends, as the market is at a climax. The global bear market is weakening, while the bull market is not strong enough.
British pound 🇬🇧 volatility is decreasing in arithmetic progression, coupled with declining trading volumes.
There are more questions than answers, medium-sized investors are curtailing their positions ahead of Brexit, the most significant investors have taken a long waiting position, and small speculators get bored of these markets and they rather prefer paper assets with increased liquidity.
Long-term - the growth potential is still relevant, however, against the background of the actual exit from the EU, a short-term decline in quotes is not excluded, followed by the transition to the active phase of growth.