The US Federal reserve has delivered another interest rate hike for the first time in 2018 and according to the Fed dot plots the 2018 outlook on the interest rates policy has remained unchanged. The benchmark interest rate has gone up to 1.75% versus 1.5% previous reading. The EURUSD bullish trend continued keep its gains despite interest rates going higher for the US dollar. The last two months has seen the EURUSD exchange rate in a frustrating trading range. While EURUSD reached overbought territory we still need a strong fundamental catalyst to change the direction of the trend. With the Fed delivering on its rates hike cycle we could have expected the EURUSD price to slide lower but it seems that the interest rate hikes are already priced in by the market. A more reasonable explanation for the current bullish EURUSD trend can be provided by the fact that on the other side of the monetary policy spectrum the ECB has adopted a more hawkish tone. The ECB President Mario Draghi has already set the objective for modest interest rate hikes after the ECB ends its quantitative easing program.  March was again a very slow trading month as we’ve consolidate the previous gains and moved in a wide trading range. Moving forward the seasonal pattern for April sees again EURUSD moving higher early in the month. The seasonal pattern only gives us the tendency of a particular currency to exhibit a certain behavior at a certain time, so we have to carefully monitor the pattern and how the fundamental forces interact with the price action. Going forward, we’re going to analyze and disseminate the major news event for the upcoming month that can be the catalyst for higher EURUSD volatility.

“Don’t risk significant money in front of key reports, since that is gambling not trading.” - Paul Tudor Jones

Monthly Forex News Events that Might Affect EURUSD Volatility – April 2018

Moving forward, into a new trading month we can highlight what are the main risk events that can disrupt the market volatility and which can potentially set in motion new trends. It’s worth to note that the Fed hasn’t scheduled any interest rate policy this month only the ECB has which makes the EUR/USD exchange rate more prone to react to the news coming out from Europe. Now, let’s move forward and see what the biggest risk events in April 2018 are:

• Monday, April 2, 2018 –The Easter Monday holiday is celebrate through entire Europe which means that we’re going to have a very low trading activity as banks are mostly close and not open for business.
• Wednesday, April 4, 2018 – The EU CPI inflation figures are scheduled to be release. The Euro area inflation rate has eroded over the last couple of months which has put pressure on the ECB ability to tapper QE.
• Thursday, April 5, 2018 – The ECB monetary Policy Meeting Accounts will give traders further insights into the ECB view on the QE program.
• Friday, April 6, 2018 - The NFP job report, which can be the catalyst for some trend development is again one major risk event of the week. The Non-Farm payrolls posted an unexpected number of over 300k new job during the second month of 2018 and we should see the positive trend in the labor market to continue. The unemployment rate is also at 4.1% a 17-year low, a trend that is expected to continue in 2018 as well.
• Wednesday, April 11, 2018 – The US CPI inflation figures is again one of those market drivers that can have a big impact on the currency exchange rate because the Fed looks at this numbers to justify further rate hikes.
• Thursday, April 26, 2018 – The ECB interest rate decision is probably the most important risk event of the month because it can decide the faith of the EUR/USD. There is growing speculation that the ECB can discuss a concrete timeline for the QE tapering process.
• Friday, April 27, 2018 – The US GDP figures for the first quarter will give traders an insight into how well the US economy is doing. The tax cuts are expected to be reflected into positive growth which can be positive for the US dollar.