The next few days will not be your regular end of the week in trading. This is largely due to two reasons; The Thanksgiving holiday in the United States on Thursday 27th and Friday being the last day of trading for the month of November.
The Thanksgiving holiday will mean that many North Americans will take leave until Monday 1st December. This means that it will not be business as usual in the North American session and prices should stay within the ranges in those sessions on both Thursday and Friday.
Friday is the last trading day of the month, therefore the end of month flows can influence trading. You can expect a lot of volatility in the London session and the US will match this from the moment their session starts, however, we expect the market to settle in ranges.
There is one event that has the potential to disturb the quiet close to the trading week and those seeking small ranges: the European CPI (Consumer Price Index).
The CPI will be released on Friday, in the middle of the European session. Once the data is released, we can then make an educated assumption about how this may influence the ECB’s (European Central Bank) next meeting, held next week, on the first Thursday of December.
Looking at the euro related pairs; there is the possibility of a squeeze higher on the EURUSD and EURGBP, based on the CPI release this Friday. The EURUSD pair is actually forming two bullish patterns so far (or at least potential bullish patterns): a falling wedge and a double bottom. However, neither of the two is completed yet. The 2-4 trend line in the falling wedge is not broken yet, and the neckline for the W pattern in the double bottom is still intact. After the two are broken we can say the measured moves for the patterns can be considered. This means that a break at the 1.2530 level, will mean the EURUSD can hope for recovery into the 1.2650-1.2700 area.
This depends on the CPI data and how the market will interpret it, so being cautious might be the best play here.
Another risk-related event for this end of week/month trading is the OPEC meeting that is taking place at the end of this week. The price of oil should influence commodity currencies greatly, namely the CAD (Canadian Dollar). CAD pairs should move a lot based on what happens at that meeting.
All the above means there’s no holiday for currency traders despite the fact Thanksgiving is here.
Don’t forget that you can trade currencies at any of our approved Forex and Binary Options brokers.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
