More Of The Same For FX Pairs?
Ian Copsey | Jan 09, 2018 11:52PM ET
The expectation of a consolidation did develop but was short lived. What was slightly surprising was the deeper pullback in USD/JPY that then encouraged the bearish EUR/USD (following its short lived consolidation) to push EUR/JPY way lower. The cross should soon see a pullback higher but not by a large degree – and that tends to suggest the potential for consolidation with both majors seeking the Dollar upside. I’m not sure whether I have the USD/CHF structure correctly but this should also see gains resume.
At the same time, GBP/USD should follow the main group in hunting up the dollar but this pair has lagged quite a bit and I wonder whether it will have a growth spurt. That’s not a forecast but just the musings of why it has not really matched the losses in EUR/USD…
What I do see is EUR/JPY the risk of a more limited move today. It needs an initial upside and then the downside – but then a pullback higher.
As for the Aussie, it has two alternatives: either we shall see an expanded flat or a direct follow-through from yesterday’s decline. Given the comments above, the second alternative appears to be the most likely…
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