Given the disappointing
Non-Farm Payrolls report of last Friday and the doubts it raised in the markets
about the potential for a US interest rate rise before the end of 2015, after
the near-certainty of such a development prior to the report, the EURUSD pair
found it hard to make up its mind about the direction it should take in
yesterday’s trading. After the London
opening the pair headed upwards, only to find its progress well and truly
checked as the morning drew to a close and the US session hoved into view.
After the
start in New York the tendency was totally reversed and the Single Currency
headed downward. All this can be seen in the chart above, as can the manner in
which the OmiCronFX Mandelbrot algorithmic trading routine followed the action.
Two trades were taken yesterday, one in each direction, and both were profitable.
The morning trade less so, but a win is a win. The afternoon trade was well worthwhile.
Medium term, single currency is still
range-bound
Looking at
the price action over the past two weeks or so (above), it can be seen that
EURUSD has consistently failed to break either 1.13, on the upside, or 1.11 at
the lower bound. This means the pair is still ranging, rather than trending. We
prefer a trend in order to attempt to capture the big wins.
This
situation is likely to continue until some better data is made available, which
could be in the form of either a commitment to early rate rises by the FOMC in
the US (or an actual rate rise), and / or some better clarity on whether or not
the ECB is on track for further Quantitative Easing (QE).
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