Dull, dreary and lethargic. On the whole, just about every currency remained within a tight range. The announcement by OPEC appears to have provoked a reaction but, as of yet, not really with any venom. Only GBP/USD and AUD/USD have managed to poke their heads above the parapet and one wonders whether they’ll be shot down before too long.
So, overall we still need to wait for breaks of the limits of the ranges that have been set. Which side? Well, it does still seem to be dollar bullish but this does make me wonder whether USD/CHF can survive. This is the one conflict I have and I’m not sure how this structure will evolve.
The other pair that has been subdued longer than the others is USD/JPY. It has a potential double bottom. I can’t imagine anyone will have missed that one but it hasn’t yet been triggered so there is still some vulnerability in this pair until we have a firmer resolution.
It has been interesting to note that after Abe scared the market with his talk of inflation (which is already in place, by the way, but surreptitiously concealed in the supermarkets) the market hasn’t really pounded the downside… I wouldn’t even rule out a minor new low but I’m not yet convinced with a strongly bearish view below 98.89…
Basically, I think today will bring us a more directional move but it’ll take until the second half of the day.