Which way will the blow in FX this week

Another lacklustre start to the trading week as the US is effectively on holiday today and the Asian open was anything but interesting. Chinese data released on Saturday was on the stronger side as was the Australian print. However, either did little to get the market reinvigorated. It seems for now the market is still reeling from the events of last Thursday and Friday and is somewhat hesitant to make an outright move in either direction for now.

Data this week is for the most part light, save for UK prints of inflation, unemployment and of course the quarterly inflation report and Carney out jawboning the bubble that is the UK. Talk abounds about whether there will be some sort of re-jigging of the BoE’s forward guidance in light of recent statistical strength and this may include changes to the bounds and hurdles as set for unemployment etc. In truth, we’ll simply have to wait and see.

On the day I have resting bids in both the Cable and AUDUSD, both of which to me look like they’ve done enough downside work for now. Having said that though, my bids are far away enough at the moment so as not cause any concern.

The EURUSD looks overall like it wants to head lower, but stubbornly so (as always). I’m not a big believer in the USD bull story for now and while “fundamentals” in the Euro zone look and are indeed weak, they’ve been that way for years now, so it simply becomes a matter of when (and for how long) the market pays any attention to this.

With a slate of FED speakers (both voting and nonvoting) on tap this week, we’re bound to see some more volatility around the greenback, but I dare say that none of it will at all be decisive or even remotely informative.

A slow start to the week as most out there look to protect what little Alpha they have and brace for a potentially timid end to the year.
Helmets on and good luck out there.

Disclaimer