Should We Be Wary of Volatility Shifts Due to Easter Monday?

Should We Be Wary of Volatility Shifts Due to Easter Monday?

10.04.2023

Last weekend, with markets in Europe and the U.S. closed for Good Friday, the U.S. dollar rose against the euro following the release of U.S. employment data showing that the unemployment rate had fallen by 0.1 percentage points from the previous month. The EUR/USD pair fell from 1.0923 to 1.0877.The pair fell below the 4-hour 20-MA and dropped to around the -2σ level of the 4-hour Bollinger Bands. From a technical perspective, the daily RSI for the EUR/USD has formed a reversal pattern, indicating that the pair has entered a correction phase. We should remain vigilant to see if the U.S. dollar strengthens as U.S. trading hours approach.

Among European currencies, the Swiss franc emerged as the strongest currency toward the end of U.S. trading hours, with the CHF/JPY pair rising from 145.184 to 146.179.During today’s Asian trading session, the pair has already broken above last week’s high, touching 146.531. We need to remain vigilant to see if the franc’s upward momentum continues toward the recent daily high of 147.492 should the yen weaken further following today’s press conference by the Bank of Japan’s new Governor Ueda.

Today’s schedule includes the Japan Economic Watchers Survey at 15:00 (Asia time); Turkey’s unemployment rate and current account balance at 16:00 (Europe time); the press conference marking the inauguration of Ueda, the new Governor of the Bank of Japan, at 19:15 (Europe time); and Brazil’s auto production/sales, at 23:00 U.S. time: U.S. wholesale inventories, at 24:30: U.S. 6-month bill auction, and at 29:15: remarks by U.S. Federal Reserve Bank of New York President Williams.Since major European markets outside the U.S. will be closed today for the Easter holiday, investors should be wary of volatility during European trading hours.