The movements in foreign exchange markets have become slow, very slow. There is a dearth of volatility that is becoming worse. Surprisingly enough, volatility was somewhat higher in August than in September and October. And the month of November is one of the worst, despite top tier events.
Some currency pairs are better than others. Yet EUR/USD, the world’s most popular currency pair, is one of the worst. The week is nearing its end and the total weekly range of the pair currently stands at around 100 pips, from a low of 1.1555 to a high of 1.1655. The previous week was even worse, just around 90 pips. Sure, the one before that saw the ECB meeting and a range of 262 pips, but that was the exception, not the norm.
USD/JPY had a range of around 163 pips this week but 146 before that and 120 previously. Is this a trend? It takes a lot of wishful thinking to believe that.
GBP/USD is know as a more volatile pair and the excitement around the BOE and Brexit should have triggered even greater movements, right? Well, this week sees a range of 120 pips, the BOE week had 280 pips in the bag and the previous one 210. So even a more nervous pair in its most exciting week saw only 280 pips.
Are commodity currencies better? USD/CAD had weekly ranges of 250, 220, and 300 pips, so it’s a bit more consistent. AUD/USD saw 73, 67 and 210 pips in an extraordinary week beforehand, but this was the exception, not the norm. NZD/USD had an exciting fall 3 weeks ago but then fell asleep once again.
These not-really-impressive weekly movements do not mask intraday action. Some days see a range of a few dozens of pips, without any drama.
Less drama, fewer opportunities
Many forex traders are on the lookout for a breakout: buy high and sell higher. Or conversely, sell low and buy even lower. Breakouts are far and few between. And even if you prefer the range, there is precious little price action within these ranges.
