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Article / 24 April 2014 at 15:28 GMT

Traders in a torpor as markets go quiet

Director / Accumen Management
United Kingdom

• German IFO fails to cause a flutter
• Draghi rhetoric falls on deaf ears
• Gold has a good day


Your scribe has been struggling all day with market-induced catatonia. Let’s face it, folks, things simply aren’t happening in this market. At all. Save for the occasional, misinterpreted news headline or erroneous speculation causing a split-second of volatility, we’re dead in the water.

This morning's data, in the shape of the German IFO, was better but this was certainly insufficient to cause even the smallest of flutters in the EURUSD. The rhetoric of the European Central Bank president Mario Draghi did little other than to put already dozing traders into a deep slumber. US data this afternoon was mixed, with weekly claims being worse while Durable Goods orders witnessed a better-than-anticipated rebound and on net gave the market a little to chew on but, for the most part, no follow-through whatsoever. Of course, the ever-present dark cloud of the imminent breakout of World War III continues to hang over our heads and it was this that gave the market cause for concern as we heard of unsubstantiated emergency press conferences from Vladimir Putin regarding the situation in Ukraine. Suffice to say, no press conference and no World War III (at least not today).

Gold had the most interesting of days though, with sellers holding the upper hand all morning as the yellow metal slipped through key supports and technical levels only to then stage the mother of all short squeezes on the back of the above rumour-mongering. And now, after all that posturing and volatility, trades were close to unchanged for the day.

Focus has turned mainly to next week’s FOMC and NFP risk events and thus anyone expecting anything remotely interesting to happen before those events is likely to be sadly disappointed. The FOMC will be a non- event as no press conference is scheduled while the NFP, well... buy yourselves a lottery ticket.

For the record, I maintain my bullish outlook for the JPY and thus a lower USDJPY. Equally so, I remain bullish of the Little Battler (AUD) and think present levels in the AUDUSD (0.9250 or thereabouts) present a good risk/reward profile for fresh longs. The cable is doing its own thing and that is mainly consolidation, the road higher for the Betty, while a little well worn already, is also the path of least resistance for the time-being.

Helmets on and good luck out there.

Ken Veksler is the director and chief investment officer of Accumen Management, a London-based boutique asset management and foreign exchange consultancy.


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