It’s been a quiet month, with trading volumes very low. Volumes of UK equities traded daily are about half the levels from earlier in the year. Yet the FTSE index has managed to reach it’s highest levels since early April. The current trend is showing upwards, with the moving averages all in the right direction and the 50EMA providing support yesterday.
After a fantastic Olympics and now the amazing paralympics, eyes are not focused on trading just yet. When you look at the narrow trading range of EURUSD this week, and for much of August, you could be forgiven for thinking the market has gone into cardiac arrest.
I can conjure up a picture of this now, the market lying moribund on the ground, not a movement. And rushing over with the defibrillator, Ben Bernanke and Mario Draghi. One of them is holding the left paddle, the other the right. Neither is too sure what to do next, but both are looking down at the patient. The patient is wearing a sweater with the words “world economy”. Now what?
Both of them are preparing their next moves. For the defibrillator to work effectively, they’ll need to both act in unison. Problem is, they are facing different battles in their own respective continents, with a USA election imminent, a Greek progress report in a few days coupled with a constitutional court decision in Germany.
All will be interspersed with a US holiday early next week, followed by non-farm payroll figures next Friday. Will the defibrillator be used? Or will the patient remain lifeless? There’ll be an interesting couple of weeks ahead. Happy trading.