EUR/USD recovers from a dip below 1.13

In the penultimate update looking at the opening vista for the US stock markets and the Nasdaq 100, there was a mention about the rebound in the dollar and the noted dip in the EUR/USD. Well, the EUR/USD did fall sharply. The drop extended to 1.1296, which was of course some way below the earlier European high, at 1.1425. The reason for the fall is not clear cut, but could have to do with price discovery. You see, at the same time the EUR/GBP fell sharply as well, towards 0.8600. What is also apparent; the lack of liquidity in the FX space could be due to pricing pools being now much less prepared to offer liquidity to the markets. More usually the two major protagonists have for some years tended to warehouse that risk and work it back through algorithms. However, the suspicion here is that they may have been quite badly hurt doing that in recent days and hence less prepared to offer such to the market now. That means what might have been a 20 pip move in days past is now more like 100. That, if correct means more volatility lies ahead folks. Anyway, the EUR/USD has now bounced off that low. It is currently trading at 1.1352