Low Market Volume is Strongly Felt

The holidays are already here. Today, two days before Christmas, the moves in the market were quite strange. The most peculiar currency is the most important one: the greenback.  

Despite weak economic data from the US, the dollar gained ground against the Euro, the pound and even against the Japanese Yen.  

Existing Home Sales, today’s most imprtant figure, was at 4.49M, much lower than the 4.9M number that was expected. Also the New Home Sales was lower than expected: 407K and not 417K.

At the same time, the  Richmond Manufacturing Index was published, and it showed a decline of 55 points, a much bigger drop than the 40 points that were expected by Forex traders.

And, despite all the bad news, EUR/USD fell again to around 1.3933, GBP/USD to  1.4733 and the USD/JPY broke upwards to 91, well over the 90 mark it was flirting with in the last few days.

All this abnormal behaviour could be blamed by the thin volume on these pre-holiday days.

More about the low volume volatility, a nice post in the ForexTVBlog.