EUR/USD: Draghi, Low Volatility, & Calm Market Behind ‘Outsized’ Move – BTMU

Draghi sent the euro up[1]. And then some ECB sources downplayed Draghi[2]. What’s next? Here is the view from BTMU:

Here is their view, courtesy of eFXnews:

BTMU FX Strategy Research notes that the most common question fielded yesterday was whether the comments from ECB President Draghi were consistent with a 1.2% surge in EUR/USD.

“Yesterday we chose to highlight the fact that our equally- weighted G10 FX volatility index had dropped by more than one standard deviation from the average going back to 1999 and perhaps yesterday’s sharp move was more a reflection of positioning with market participants caught out,” BTMU argues.

“Low volatility and calm market conditions breathes complacency and can result in out-sized moves relative to the fundamental explanation behind the move. 

However, looking through the comments we would also acknowledge that there was certainly a greater emphasis on highlighting the positives in contrast to the ECB monetary policy press conference when perhaps the focus was more on playing down the progress in order to diminish any exaggerated move,” BTMU adds.

For lots more FX trades from major banks, sign up to eFXplus[3]

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs[4]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/u5j8OfX0kWY/

from Online Forex Trading Resource
View thesource article here

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s