FX market still in cross-movement phase
I’m still of the opinion that we are in a cross-movement phase of the FX market with the AUD looking like the main loser and the EUR likely to emerge as the main winner. It’s not that the EZ suddenly has outstanding prospects or anything, more that the market is structurally short and most of the big banks report a net-net demand for the EUR from its customer base on a month-to-month basis.
EUR/AUD is headed to 1.38 and possibly higher; whether this means that the EUR/USD is at 1.38 and AUD/USD at 1.00? Or whether the EUR/USD is at 1.27 and AUD/USD at 0.92? That remains to be seen but its probably a mix of both.
USD/JPY is in a consolidation phase of a strong up-trend, USD/CHF is overall bullish but has lost momentum in the short-term and is retracing, and the GBP doesn’t seem to have any momentum of its own and relies on the other majors for leads.