The NFP did its usual duty of whizzing one way and then the other. One wonders whether it makes any sense to be honest. It forced me into the 1-minute charts and, on occasions, tick-bar charts to try and resolve the structure. For the most part I think I managed to work things out, with the exception of USD/JPY that has been plaguing me with spider tracks and webs for structures.
Anyway, as far as I can see – again, for the most part – today does not look like a trending day but more a day of swings within a range. This is apparent mostly in EUR/USD and USD/CHF and potentially also AUD/USD – perhaps to a lesser degree.
The outlook in GBP/USD is less certain, having remained in a swinging range since the latter hours on last Tuesday. The haunted echoes of Brexit will retain a high risk of uncertainty for some while – at least through to next year. I don’t particularly see this as being anywhere near as the catastrophic cries of a broken economy. Indeed, over time, I expect sterling to rise from the Phoenix’s ashes.
I don’t see that for EUR/USD. However, for now the major risk remains on the downside, but the question is whether follow-through lower will occur directly or indirectly. What I do feel is that the losses we saw over Monday and Tuesday last week have been a tad too much too soon. I feel the next week or two could be volatile.
The Aussie did its boomerang thing again, swinging back to such a degree that it’s tending to be a bit too extreme. I’m not sure the boomerang will come back… However, just for now, it looks more like bubbling around for a while, so I’m not expecting too much from this Antipodean today.
Now, USD/JPY… What is up with this chap? All I have found over the past three weeks is dead ends, conflicts and a massively difficult structure. It has left me waiting for a more definitive outlook, but so far I’ve not managed to resolve this. Until this becomes clearer I think it better to hold off until a stronger break – in either direction – is seen. Certainly, the longer we drift away from the 48-week cycle low without any clear break higher, the downside becomes a threat. For now, I think we need approach this with care…