It’s always difficult to judge the market on the first trading day – or even first trading week – of the New Year. I’ve seen New Year markets bolt right out of the gate while others begin with a cautious, defensive approach. I’m not quite sure which will occur this year but whether directly or more ponderously the outlook for January seems to suggest some broad swinging development. As the year moves on the volatile outlook appears to suggest even stronger swings.
As for the first moves… well, looking back at December’s rather strange mix of development that had some whiplashes and occasional lack of correlation between the majors, I wonder whether we may just see a little more of this over the first week of the year – maybe into next week too. The broad outlook I provided just before Xmas still basically remains for the majors and how the market exits the gate over today will probably give us a stronger clue to how this will develop.
There were just two pairs that didn’t follow my bidding – and they were AUD/USD and EUR/JPY. The former was a bit of a surprise but I still feel that the broad volatility will continue while the cross remains a conundrum and could still be pointing towards a complex correction. The balance between USD/JPY and EUR/USD has been rather tempestuous so until the market gets settled over the next week or two will likely provide a more directional move.