Should investors be wary of increased volatility due to Easter Monday?

Should investors be wary of increased volatility 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. It dipped below the 20-period moving average on the 4-hour chart and fell to around the -2σ level of the 4-hour Bollinger Bands. From a technical perspective, the daily RSI for EUR/USD has formed a bearish reversal, indicating that the pair has entered a correction phase. We should remain cautious regarding whether the U.S. dollar will strengthen as U.S. trading hours approach.

In European trading, the Swiss franc emerged as the strongest currency toward the end of the U.S. session, with the CHF/JPY pair rising from 145.184 to 146.179.During today’s Asian session, the pair has already broken above last week’s high, touching 146.531. We should remain vigilant to see if the franc continues to strengthen 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 3:00 PM (Asia time), Turkey’s unemployment rate and current account balance at 4:00 PM (Europe time), a press conference by new Bank of Japan Governor Ueda at 7:15 PM (Europe time), and Brazil’s auto production/sales, at 23:00 US time: US wholesale inventories, at 24:30: US 6-month Treasury bill auction, and at 29:15: remarks by US Fed President Williams of the New York Fed. Since major European markets outside the US will be closed today for the Easter holiday, we should be on guard for volatility during European trading hours.