The market movements can be said to be quite chaotic at the moment. Historical trends are being reversed. The trending down AUDUSD pair began a rather bullish move as a result of China's economic growth. The New Zealand Dollar is tumbling even still after many went long trading the trend-line rebound. The EURUSD hit what it looks like 8-month lows with many believing will go lower. GBPUSD is another pair taking two months of hard hits after a supposedly strong uptrend. With the Ukraine-Russia crises, the markets are very sensitive to the news. For the rest of the time, it remains rather quiet.
Just how quiet? How about quiet in years? Taking a look at the volatility history, we better hope to see some major trends. More and more analysts are concerned with the U.S. stock market crashing due to the rapid growth over the past five years. Hopefully this will soften the devaluation of all other currencies against the U.S. dollar. Without going into too much details, let's take a look at the volatility surrounding the Forex market.
Not looking good for EURUSD. This is to be expected especially with the heavy devaluation of this pair. Due to the devaluation, we're not seeing many swings and so this pair remains rather one sided. The 2008 recession brought this pair down to about the same state only it doesn't look like volatility will increase any time soon.
Same again, hitting new lows. It may be years before we reach the same level of volatility seen in 2009. I've always thought this pair would carry more fluctuations, but looking rather quiet as well.
Seems to be having greater volatility than the EURUSD as it sits above the '50' mark. I guess the recent trend break is still causing some buyers to drive the price back up, but fundamentals driving the selling pressure.
It shares a rather similar move with the GBPUSD. I'm still quite optimistic about this pair. The RBNZ rate hike should bring-in greater demand for the NZD provided all-else not worsening off. If you've seen my last post, NZDUSD still has a long way to go before we see any kind of reversal.
The second most boring pair in my opinion, but it looks like the volatility is coming back. Still too early to tell, but the curve up and the end there is a good sign.
And now the most boring pair in my opinion. Volatility took a sharp dive recently, but this looks rather like a trending pair with two distinct ranges. I also made another post detailing the sell sentiment on this pair as well.
Making things a little more exciting, here's USDJPY. We should see volatility pick up as it reaches the 2012 low again. This pair is expected to keep climbing. I suspect the spike in 2013 and early 2014 is caused by the 100.0 price mark. USDJPY made several cross-overs along the $100 mark and eventually pushed through. The Yen does not look too good either so I expect a stronger USD performance here as well.
Well, there you have it. Volatility is low, but it will come back. In fact, we need it to come back. This market is built around having adequate volatility so traders can profit off of the price fluctuations.
Stay tuned for my crude oil forecasts over in the 'Forecasts' session.
