Wednesday, April 20, 2016

A mixed bag of all sorts…

The market appears to have opted for a weaker Dollar but not uniformly. It’s a bit like the argument for Brexit – or not. Opinions have been stated, counter arguments against direct arguments and even a statement from Juncker saying that: “the EU should interfere less.” The States are building up to their Presidential Elections and basically the world is having a barney over this that and the other.

No wonder the markets are so skittish – and look to remain that way for a while longer yet. I’m pretty certain of the outcome for Forex and equities, even with the current situation in flux. It’s more of a matter of how we get to the point where we will see a trend develop. I feel this will come to a tipping point over the next 4-6 weeks. Until that point we are going to suffer from the current higgledy-piggledy development.

Yesterday’s more sustained moves in EURUSD and USDCHF tend to point to the basic trend – not that it will last for too long. GBPUSD has followed their outlook but appears to have taken time to disentangle itself from its EU counterparts. Meanwhile, dahn-under, the Aussie has made a bigger statement by extending the rally. It’s not going to be a direct move so expect some pullbacks from time to time.

Meanwhile, over in my neck of the woods, USDJPY has resumed its rally and should maintain that but it has taken to the roads in Tokyo, getting gummed up in traffic instead of sitting on the Shinkansen. This process looks set to continue – slowly – for some while but I suspect by the time May begins there will be further losses. Therefore, the route higher is likely to be a winding road. With EURUSD expected to rally, and USDJPY (in stages) it will help EURJPY higher but it doesn’t look like an easy ride.

Steady to rubbish trading to continue…

Good trading
Ian Copsey  

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