01 February 2012 at 9:01 GMT
Month end maybe, whipsaw market, definitely.
We continue to trade without any rhyme or reason as ranges get messier and tighter with each passing day. This overall mood does not bare well for the market as punters continue to look for something concrete to hang their hats on (even if it’s only for a few days) and with this whole Greek nonsense fading into obscurity as far as directional plays are concerned, we’re left to ponder what next and more importantly how to attack it profitably.
Overnight we had better Chinese PMI data, but even this did little to ruffle the market’s feathers.
Having traded ever so poorly during the European session, the USD came roaring back into the end of day and this morning holds a little steady. Equity markets are now all but entirely driving FX markets as rates will stay low for what seems like forever, where else would you put your money other than an overinflated and unsubstantiated equity market? Clearly the fixed income space isn’t doing the trick anymore...
The day ahead has a whole raft of PMI data out across the market and most will be keenly looking for clues in these figures, however, what can one expect when the world is either, in, on the brink of or denying a recession.... We also have the ADP print today as a precursor to Friday’s NFP, but as recent months have proven, there is little in this that will truly influence the Friday print or vice versa.
Moving onto the majors, despite some levels having been tested and broken yesterday, the overall theme remains, wherein we’re still consolidating the January rally and starting a fresh month has done little to give the market any real guidance.
In EURUSD, having held the 1.3030 level this morning, we’re off to the races early doors, but I dare say that further growth beyond 1.3150 will be hard going today.
The Cable continues to shine and Cameron’s veto seems to have done the job, at least as far as the currency is concerned. Until such time as there is either a close above or firm rejection of the 1.5830 level, this thing remains well bid. Having said that though even upon correction, 1.5550 remains the downside target.
The AUDUSD is in a similar boat to the Cable, and given last night’s Chinese print... well why not really... The downside sees good bids in and around 1.0480/0530, while the topside remains relatively open.
EURCHF is tempting fate and perhaps the nerves of the SNB, we came within 30 points yesterday of that line in the sand... Keep an eye on it folks.
Finally one last mention of how this market looks. It remains a very firmly order- and stop-driven market, however sadly, the major order books, of the larger players are getting thinner and thinner with each passing day, making this market harder to pick than a broken nose.
Helmets on folks.