Markets Consolidate As Re-Open Uncertainty Grows - Forex News by FX Leaders
Markets continue to be confused

Markets Consolidate As Re-Open Uncertainty Grows

Posted Thursday, April 16, 2020 by
Shain Vernier • 1 min read

As we roll into mid-April, vast uncertainty looms over when the global economic system will reopen for business. While some COVID-19 restrictions are being eased in certain regions, others remain on full lockdown. Timelines for a restart vary according to municipality ― as of now, no concrete relaunch date has the markets in limbo.

In the U.S., it’s politics-as-usual as Democrats and Republicans clash on how to enter the post-coronavirus era. Concerns over reversing containment have prompted ambiguity regarding when existing lockdowns will be lifted. The result has been a stagnate week on the markets as investors take a wait-and-see approach to the developments.

To illustrate how the action has dropped off, today’s reading on the CBOE Volatility Index (VIX) comes in around 41.00, down from 59.00 on 1 April. While this number still suggests significant activity in the U.S. stock markets, volatility is certainly on the decline.

Currency Markets Enter Rotation

It has been a sporadic forex session, with the Greenback hanging in there versus the majors. One of the largest movers has been the EUR/USD with a daily range of 95 pips.

EUR/USD, Daily Chart
EUR/USD, Daily Chart

Here are the levels to watch for the EUR/USD:

  • Resistance(1): Daily SMA, 1.0899
  • Resistance(2): Bollinger MP, 1.0910
  • Support(1): 78% Current Wave, 1.0748

Bottom Line: If we see more sideways action in the currency markets on Friday, a selling opportunity may set up for the EUR/USD. Until the weekly closing bell, I will have sell orders in the queue from 1.0894. With an initial stop loss at 1.0929, this trade yields 35 pips on a standard 1:1 risk vs reward management plan.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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