With the long weekend in Europe and the U.S. coming to an end, will liquidity increase? Or should we be wary of volatility?

With the long weekend in Europe and the U.S. coming to an end, will liquidity increase? Or should we be wary of volatility?

11.04.2023

In the previous day’s U.S. trading session, the U.S. dollar rose against the yen after the Bank of Japan’s new Governor Ueda announced at his inaugural press conference during European trading hours that the bank would maintain its massive monetary easing. On the daily chart, USD/JPY has been forming higher lows and has risen to just below the 200-day EMA. It has also hit a new high for the month. While the Dollar Index is currently hovering around 102.3, we will be watching the direction of the U.S. dollar to see if a rebound occurs during U.S. trading hours.

In European currency markets, the pound rebounded against the U.S. dollar during today’s Asian trading session following the release of the UK’s March BRC existing retail sales figures, which showed a 5.1% year-on-year increase.Although the GBP/USD pair fell from 1.2442 to 1.2345 yesterday, it rebounded during today’s Asian session following the release of the data and has already recovered to 1.2407. On the daily chart, the GBP/USD pair has been rising within the range between the -2σ and +2σ Bollinger Bands, so we will be watching closely to see if the pound continues to strengthen against the US dollar.

Today, Japan’s machine tool orders are scheduled for 15:00 Asia time, followed by Turkey’s industrial production at 16:00 Europe time, Eurozone retail sales at 18:00, the U.S. NFIB Small Business Optimism Index at 19:00, South Africa’s manufacturing production at 20:00, a U.S. 3-year Treasury auction at 26:00 U.S. time,at 2:30 AM, remarks by U.S. Federal Reserve Bank of Chicago President Goolsbee; and at 7:00 AM the following day, remarks by U.S. Federal Reserve Bank of Philadelphia President Harker. With markets reopening after the long weekend in Europe and the U.S., we should watch for potential increases in liquidity and be mindful of volatility.