Investors should watch for price movements that may reflect expectations of lower volatility later in the week

Investors should watch for price movements that may reflect expectations of lower volatility later in the week

20.12.2021

Last weekend, all three major U.S. stock indices fell, creating a risk-off sentiment characterized by falling stock prices, lower interest rates, and declining oil prices. The Dow Jones Industrial Average dropped by more than $500 from the previous day, closing at $35,365. Following the announcement from the U.S. Federal Open Market Committee (FOMC) last weekend, speculation about an early interest rate hike emerged, leading to a sense of caution in the market and triggering a wave of selling.

As of last weekend, the US dollar and the yen emerged as the strongest currencies in the foreign exchange market, causing cross-yen pairs to decline slightly. Among the cross-yen pairs, the euro/yen saw the most significant drop, falling more than 100 pips from 128.98 to 127.77.Technically, the EUR/JPY has pulled back as its upside was capped by the daily 200-day moving average (MA). Since it has fallen below the recent low of 127.87, we will be closely monitoring whether it breaks below the next target low of 127.49.

Apart from the release of the Eurozone current account balance at 6:00 PM, the UK CBI Business Survey at 8:00 PM, and the US Leading Economic Index at midnight, there are no major economic indicators or key speeches scheduled for today.This week, with the US Q3 GDP (final reading) scheduled for Wednesday, the 22nd, and the US PCE Deflator set for Thursday, the 23rd, liquidity is expected to decline in the latter half of the week on the 24th and 25th, as Europe and the US observe the Christmas holiday. We intend to carefully monitor how the foreign exchange market reacts following these key events.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed