No great surprises on Friday. We’re currently in a development that has some choppy swings and appears to suggest a noisy start to the week. As such, there’s not much room for any decent trends by the look of things. Perhaps USD/JPY and GBP/USD could be a little more dynamic but it’s not a given at this point – though keep the alternatives in mind.
Now that the U.S. presidential election has been decided with its knee-jerk reactions on both Forex and equities, I feel there will be a calming of the markets for a while. However, over the coming week I feel that the market is going to pull back from the harsh and emotive campaigns to wait for firmer statements to be made that will generate a more definite outcome. I remain with my larger directional expectations although even they promise some pretty wide swings as we move forward over the coming weeks and months.
Anyway, back to the current situation, Friday’s trading was basically within the boundaries of the options that the market had and this still works with my outlook. The Europeans are quite stable and I expect more of the same. The Aussie also worked well but it’s going to continue to see some hourly swings. USDJPY still needs to sort out the current consolidation before it can launch itself into a trend again… This leaves EUR/JPY still at risk of a consolidation that could remain quite frustrating.
Thus, best focus on the Europeans – but with care – and also USD/JPY…