Friday, August 12, 2011

Eyes peeled…

The monkey’s moving closer…

There are definite signs of life… The currency pairs are all moving towards what should be a decisive moment and all it appears, beginning to correlate with one direction… The Dollar looks more and more on the brink of a move lower… dare I say “collapse…”

Maybe I’m conjuring up a false correlation but yesterday’s moves were quite uniform in many respects, removing some of the discrepancies and more critically, with the positive exception of USDCHF, all resisting a substantial Dollar gains. Indeed, the rush higher in USDCHF was in the right direction even if I didn’t anticipate it developing quite so quickly. This has alleviated some of the extreme divergence against the other Europeans, even if it had created that divergence itself by such persistent losses.

I could even see some of the Dollar weakness beginning today. If it does I can’t see it being strong at this point but when USDCHF has reached its target I feel we’ll start to see losses begin to accelerate. In all I feel we probably have 2-3 months for this move at least and I think that by the end the general feeling will be one of shell shock, rather similar to that seen in the equity markets these past two weeks. It now seems time for the currency markets to assume some of the burden.

The downside in equity markets is all but done with only the risk of one final push lower… I feel they’ll rally directly but have to voice some caution until they’ve recovered just a bit further. I don’t see the equity markets being rampantly bullish but more erratic and messy recovery.

Softly, softly catch a monkey…

Have a great weekend
Ian Copsey


No comments:

Post a Comment