What to keep in mind while trading with a light economic calendar?
All the major currency pairs are moving at their pace with the absence of key fundamental events. Overnight news of Tesla’s Investment in bitcoin made high volatility in the Forex markets. Tesla acquired $1.5 billion in bitcoins in January and plans to accept it as a form of payment for their products in the near future, subject to applicable laws and initially on a limited basis.
In addition China is having New Year & Spring festival holidays of around 8 days starting from Feb 11. On that basis, participants are less in FX markets, volume will be less too and this might affect market volatility.
In addition, U.S. dollar is trading noticeably lower against major peers on the back of improvement in risk appetite while stocks hit fresh record high. Tomorrow, BOE Gov Bailey (1700 GMT/2230 IST) and Fed Chair Powell (1900 GMT/0030 IST) are scheduled to speak. Most probably ECB President Lagarde and BOC Gov Lane may speak about the current scenario, yet not confirmed. One thing is common in all the Central Bank Gov’s speech and that is positive on “Economy Recovery”.
On the other side, markets eye on new fiscal stimulus from the U.S. government. Last Friday the U.S. senate endorsed President Biden’s $1.9 billion trillion stimulus package after U.S. Vice President Harris cast the tiebreaking vote. The House likely to pass relief package over the next two weeks and Biden hopes to have Senate approval and the final package signed by March 15, 2021.
XAU/USD (Gold): Gold trades remarkably higher and hovers around key resistance at $1,848 mark. The pair made intraday high at $1,848 and low at $1,828 mark. A sustained close above $1,848 will test key resistances. Alternatively, reversal from here will drag the parity back below $1,830 mark.
Key Resistances: $1,854, $1,862, $1,870, $1,877
Key Supports: $1,827, $1,820, $1,815, $1,807
Take a look and do trade wisely!