The last update on the 23rd December proved to be pretty accurate with some minor adjustments required in the GBP/USD, AUD/USD and EUR/JPY. From what I have seen of the development in the majors the market still remains rather illiquid highlighted by the extreme swings that are pushing limits in the intraday structures. Indeed, this is likely to continue through to next week before the current anticipated development is complete.
The EUR/USD and USD/CHF were pretty close to being spot-on and still have 1-3 days to satisfy completion of the move suggested just before Christmas. I do get the impression that these tail-end moves could be quite direct except for the final stage where a deeper swing is required. Thus the expectation that these will not be complete until next week.
The GBP/USD was stronger than expected. I still have some niggling doubts about this one, not so much that it has been stronger (but still within the limits of the current move) but more of the expected outcome that appears to be at odds with the EUR/USD and USD/CHF. Basically the reaction in the GBP/USD needs to be somewhat more aggressive. Thus, more care and attention is required for this chappie.
The AUD/USD almost developed as expected but then moved back into range. This opens a few options and I suggest holding back until the structure becomes a little clearer. For the moment expect range trading but basically we need note the extremes of the alternatives to provide a firmer idea of what will happen next.
The JPY pairs did provide a stronger directional move as expected, perhaps EUR/JPY a little more than expected – or at least more directly than anticipated. What happens first in the cross will be important and should match with the Europeans. Meanwhile I feel USD/JPY should remain in a corrective structure for a day or two.
Thus, for this week and into early next retain a short term outlook and don’t look for extensive moves at this point.