Trade currencies with strong fundamentals says Deutsche Bank because realized volatility has collapsed and markets are trendless at the moment, reflecting QE3 and the removal of euro-zone tail risk with the announcement of the ECB's OMT program. "History shows that periods of trendlessness can persist. Over the last 12 years markets have remained at current levels of trendlessness for greater than one week on 36 occasions. Of those periods, the average duration of trendlessness was 20 business days. Since we have been in this environment for 8 days, a breakout may not emerge for another 2 weeks," says the bank, adding that a Spanish bailout and the US elections could prolong the trendlessness.
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