If yesterday’s trading represented Santa’s navigation system, I’d say he was royally inebriated. To be honest, at this time of the year, trading is more like pass the $$ parcel rather than looking for trades. Having said that, even if the route may be like a winding river, it will always find the appropriate ratios. Weird as it may seem, if there is any downside, it’s the lack of robustness that we saw yesterday. I say that because my EUR sell order failed by 1 point – but GBP/USD made a decent decline to a new low.
To be honest, EUR/USD and GBP/USD are basically mapping out moves that have a degree of correlation between daily and hourly but in different sections of the structures – GBP/USD “lagging” the euro in the daily charts. They’ll come together later but probably not for a 2-3 months at least.
So right now, due to the seasonal lacklustre in the market, we should continue to see swings in both lower degree and higher degree fractals. The targets, both downside and upside, are pretty much set for quite some while and probably won’t begin to see daily trends until well after the New Year.
For today we’re more likely to see most pairs being dollar bullish – GBP/USD and AUD/USD probably being the exception to a degree. However, for at least half of today I can’t see too much excitement. By the second half we’ll see more movement but don’t get too carried away.
EUR/JPY has finally slipped lower but the structure is a little ambiguous. If USD/JPY can manage to generate decent gains early on, it could help – mostly from a recovery in USD/JPY most likely. However, don’t expect robust moves.