It’s Friday. They’re counting the votes… Quite clearly, the market liquidity is thin, very thin and while I was attempting to go through the analysis the whips and swings made life difficult. However, I have been surprised how the market has moved so much.
I had expected a quieter lead into the day but clearly the market felt otherwise. I had hoped that the Asian session, things should begin to calm down somewhat but a 300 point drop in USD/JPY in the space of less than 5-minutes to make a new low 11 points below an alternative target I have highlighted for over one year… I have to say I was not expecting that drop.
Equally, the other currency pairs have gone haywire and frankly it will be better to allow the market to calm down. Moves of 2%-3% in a blink of an eye are not conducive to trading.
From my charts, forgetting momentum and all the standard incumbent techniques which will be irrelevant in these circumstances, I am looking at the structures. I have had problems with the structures recently – too many whips due to the lower degree noise – but from the combination I have, I still feel the dollar is going to be the main beneficiary – Brexit or no Brexit. In the Dollar Index we’d need a break below the 3rd May low at 91.92.
In general, once the vote is over and done with, I do feel we are going to see some substantial moves. Be aware…