Tuesday, November 8, 2011

Busy going nowhere…

The market spurned the chance to take more decisive action to allow the Dollar to subside into messy range trading. Indeed the structure it took overall provides it with the excuse to do very little at all again today – or for part of the day at least. This is a picture that seems to be valid just about across the board. Heaven help us if this is a show of solidarity with USDJPY to allow the all currency pairs to remain in 25-30 point ranges for the day…

It does therefore look like today will be a repeat of yesterday, though probably more Dollar downside risk than upside. At some point it’s obviously going to break and even if the Dollar has set up a structure that is totally ambiguous the break can occur very quickly. With the background being as it is the sharper move would probably be Dollar bullish as its hard to see the market shedding its fears at this point, and it’s fear that will drive price more aggressively.

Therefore it’s difficult to provide any stronger and robust view until the current status quo is broken. From my point of view the Dollar downside still appears to be the more convincing when taking equity markets into consideration and that is my favored outcome but at this moment it’s hard to argue the case or feel 100% confident.

Thus, for today we should be prepared for a day similar to yesterday but at the same time being aware of key breaks that will provoke a more directional move…

Good luck
Ian Copsey


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