Forex Day Trading Moves Sideways After Volatile Week

Central banks around the world announced their monetary policy intentions last week, leading to a significant wave of volatility in the forex day trading markets. However, now that things have stabilized, it appears that rates are moving sideways again.

A notable example is the USD Index, which remained close to 102.50 but lost over 1% of its value. 10-year Treasury yields fared even worse, losing just under 4% of their value last week. They have since stabilized. Given the considerable volatility last week, it’s not surprising that forex traders are closely monitoring future central bank announcements.

Fed’s Decision Impact on Forex Day Trading

The main event triggering the significant shift last week was the Fed’s statements on monetary policy. The US central bank announced its intention to implement three rate cuts in the coming year, leading to significant downward pressure on forex patterns as the US dollar declined after Wednesday. Over the next two days, there was a noticeable downturn, followed by some modest growth in stock indices for futures contracts this Monday.

As a result of these changes, the US dollar’s value shifted against several major currencies. For example, the NZD/USD rate managed to rise during this period due to positive data points from New Zealand, including Consumer Confidence data and Business PSI.

Turning to Europe, the EUR/USD pair rose by over 1% in forex day trading, although it experienced a slight drop on Friday, maintaining stability around 1.09 as of Monday morning.

Finally, the GBP/USD rate increased by almost 1% over the week but also saw a similar drop as the euro did on Friday.