FX volumes and volatility are back

<p>Volumes have finally started to increase in the world of FX as G10 volatility increases from a July base of 5% to breaking 8% this […]</p>

Volumes have finally started to increase in the world of FX as G10 volatility increases from a July base of 5% to breaking 8% this morning. The buy dollars, wear diamonds theme continues following very strong homes sales data from across the pond yesterday. This will no doubt encourage Fed Chair Janet Yellen following her ‘data dependant’ FOMC press conference last week, with the housing market having been highlighted in recent months as a growth disappointment.

The NZD underperformed in Asia following an unusual statement from RBNZ Governor Wheeler titled “New Zealand’s Exchange Rate: Why the Reserve Bank believes its level is unjustified and unsustainable.’’ The Governor then went on to add the NZD was susceptible to a significant downward adjustment over the next 6-9 months. He added that the level is inconsistent with the economic factors that usually explain the moves as they feel the NZD is deviating away from its long-term equilibrium level.

The euro took the lead in the ugly currency contest from the NZD this morning. ECB President Mario Draghi suggested he will do more to fight low inflation in the Eurozone as the 5 year inflation predictions still remain below the 2% level

- DRAGHI SAYS ECB READY TO USE ADDITIONAL UNCONVENTIONAL MEASURES

- DRAGHI SAYS ECB READY TO ALTER SIZE, COMPOSITION OF MEASURES

- DRAGHI SAYS GEOPOLITICAL TENSION IS ‘CLEAR RISK’ TO EURO AREA

- DRAGHI SAYS EURO-AREA RECOVERY SEEMS TO HAVE LOST MOMENTUM

The US session will bring us the volatile durable goods data which I prefer to refer to as aircraft sales.

 

EUR/USD

Supports 1.2695-1.2660-1.2600  | Resistance 1.2750-1.2785-1.2820

 

USD/JPY

Supports 109.00-108.70-108.30  Resistance 109.80-110.00-110.40

 



GBP/USD

Supports 1.6230-1.6160-1.6060  Resistance 1.6330-1.6365-1.6420

 

 

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