Getting back to normal in a Brave New World
I’ve started getting back into the swing of the market and it can be advantageous sometimes to spend some time away and become less emotional about levels and directions. What has surprised me is the large number of bank analysts who are very USD bullish in the shortish term. I understand their reasoning, basically they are looking at other ‘crises’ over the last 50 years and using the same logic in today’s markets.
But times have changed and I don’t think you can expect markets to react in the same way now that they did post GFC bail-out.
For me the most important factor is that we will go from globalisation to localisation almost overnight. I have no idea how long this phenomenon will last for, but I do know that if global trade ties up, the demand for the greenback will follow suit.
Then we need to figure out what to trade? I can’t buy GBP with any confidence (especially after an 800 pip rally!) so I will be looking for buying opportunities in EUR/USD, AUD/USD and Gold to a lesser degree.
Wishing you all the best of luck, stay safe, and do the right thing always.