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23.04.2019 12:26 PM
Selling of EUR/USD and AUD/USD pairs as the foreign exchange market continues to swing from side to side

The foreign exchange market continues to be characterized by an unconventional extremely low activity and accompanied by the same low volatility.

We have repeatedly pointed out earlier that the uncertainty caused by the actions of the world's largest central banks led by the Fed, regarding the prospects for monetary policy which resulted to a significant decrease in investor activity on the Forex market. But in the past few months, the US stock market has been growing uncontrollably in the wake of the "buybacks" of the largest industry giants and the unstoppable growth of stock indices. All of these also happen against the background of a directly proportional fall in market volumes. It seems that the owners of these companies are still using the possibilities of high and sufficiently cheap liquidity to repurchase shares of their companies under conditions of uncertainty and low market volumes. It seems that the owners of these companies are still using the possibilities of high and sufficiently cheap liquidity to repurchase shares of their companies under conditions of uncertainty and low market volumes.

Looking back to the likely actions of the Fed, its May meeting will be important for understanding possible further actions by the American regulator as we see it. After the collapse of the local stock market at the end of last year, the Central Bank abruptly changed its view of the course of monetary policy and made it clear that it was a wait-and-see attitude earlier this year. At the March meeting, he confirmed his tactical plans and now, from its May meeting, investors are already waiting for some real action while hoping that the regulator will nevertheless take a final decision on the prospective reduction of interest rates in order to maintain the demand for US assets. Yet, so far, the market has no firm conviction that this is exactly what the bank will do, which is why there is a drop in market volumes with a simultaneous strong decrease in volatility.

Given this state of affairs, we believe that the overall lateral dynamics in the main currency pairs will continue at least until the Fed's monetary policy meeting.

Forecast of the day:

The EUR/USD pair continues to drift down, remaining in the lateral range generally. If the price holds below the level of 1.1245, it can continue falling to 1.1225 and then to 1.1210.

The AUD/USD pair is likely to continue its local decline in the prospects for an increase in RBA interest rates. We consider it possible to sell the pair with promising targets of 0.7090 and 0.7070.

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Pilih timeframe
5
mnt
15
mnt
30
mnt
1
jam
4
jam
1
hari
1
minggu
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