The market works in strange ways – at times at least. We didn’t get the minor follow-through I had been expecting yesterday and that was frustrating. One point I noted was that, compared to the rather fractious development over the second half of December, there was a general correlation across the major pairs. It has left me with a headache in terms of the general directional moves and the degree of swings that appear to still be ahead.
So I’m not sure we’re going to push any extreme boundaries over the rest of this week and probably next also. Yes, there should be new highs and new lows but not excessive ones. We could also see some complex corrections – and most likely expanded flats in some pairs.
After the general weakness in the dollar yesterday, while I can’t rule out some extension, today should reverse yesterday’s trading, although perhaps not over all pairs. The key is to set realistic targets and take profits when offered.
Otherwise, today should be steady but likely relatively tame.