Forex Trading Forecast: Expect More Volatility This Week

Today should be a relatively calm trading day, with U.S. markets closed for Memorial Day, and with London closed down for a bank holiday. Once markets in Germany and France close, it is unlikely that we will see much movement.

However, warns GFT's Kathy Lien in FX360, this should not be mistaken for a permanent situation. The forex trading forecast calls for a very volatile week, once Monday is over and trading resumes as normal on Tuesday:

Traders should not mistake the expected dip in volatility on Monday for a quiet trading week because it will be the calm before the storm. Not only will the Fitch announcement hang over the market next week and raise fresh concerns about the outlook for the Eurozone and the attractiveness of euro denominated investments, but the economic calendar is jammed packed with market moving data. ...

There is a very good chance that the major currencies will break out of their recent ranges and provide new trading opportunities.