There’s a certain weirdness in this market. Back around 2 weeks ago I noted that GBP/USD needed to make a new high after an initial pullback. It came earlier than expected, triggered by the Fed’s interest rate announcement on Wednesday and which pushed the dollar to the downside.
EUR/USD and USD/CHF reacted with verve and intent. GBP/USD barely managed to generate any enthusiasm for the upside at all yesterday. @dumbstruck… It has an awful lot to do to catch up with their European buddies. It’s certainly going to need some due care and attention from this point.
Otherwise both the Europeans are performing really well. They’re going to need some deeper pullbacks at some point, so I’m not expecting a resolution today… but overall they seems to be settled in their respective structures – even if one is corrective and the other impulsive… That just leaves the Leavers having to make up their minds what they want to do…
Another surprise was the rather static move in USD/JPY. This pair is sitting in a neutral zone that could provoke a move in either direction. I’ve been told that there’s a BOJ announcement – as far as I can see an interest rate decision – but we need to be on our guard because it should trigger a stronger move – whether up or down.
Indeed, by the time I’ve written the report it’ll all be known… Naturally, that’s going to impact on EUR/JPY – also in a position that could break to either side. Clearly, it’s a case of following the break direction.
Meanwhile, the Aussie – in its inimitable way – looked at the chaos around it and decided to stay in a range. This was one of two scenarios I outlined yesterday but I can’t rule out the other. One way or another this will sort itself out either today or into Monday. Otherwise the underling outlook I have been suggesting remains in place…