Watch and wait and mixed trading dominates the markets
The latest round of online forex trading news highlights the continued fact that traders are adopting a “watch and wait” approach in terms of any significant movements. Part of the reason for this strategy is that there is relatively little data expected to be released over the next few days.
If anything, the details which have emerged are far from promising. Once again, economic figures released from China have echoed weakness while the recent sell-off in oil (regardless of short-term technical gains) highlights that markets are still in a sluggish position.
With very little raw data to influence trading, forex investors are instead basing their positions mainly off of stocks and equity movements. This risk-averse stance is only expected to solidify as we approach the final weeks of 2015.
Hovering in Neutral Territory
While European stocks saw some positive momentum, this were quickly trimmed back into neutral territory and thus, it is not expected to see massive fluctuations in the foreign exchange market within the next few days. Another motivating factor for such neutrality is that the Bank of England has clearly stated that any market predictions in terms of a rate hike by the federal Reserve will be hard to immediately interpret. Thus, it seems that even the BOE is wary to take any firm position on what may be around the next corner.
Traders must then take into account that the euro-dollar relationship has seen only modest gains and notwithstanding losses in equity trading, the euro-pound ratio has likewise struggled. In simpler terms, there are little short-term profits to be found across the boards.
With many online forex trading experts classifying the markets now as strongly bearish, any significant changes leading up to the new year are not likely. All eyes will remain focused upon the looming interest rate increase by the Federal Reserve.
