I’ve been caught in the washing-machine tumble cycle for the past few months and my most recent efforts to pick a short-term reversal in USD/JPY came to naught.
Overall signals are still mixed in my view; the metals look bullish but are rangebound, USD/JPY feels solidly well bid, cable feels like it should see a test of 1.45 and both EUR/USD and AUD/USD are still in medium-term bullish mode but looking tired (the technicians will call it ‘working through over-bought conditions’).
I am going to have another go at picking a turn in USD/CHF. I could go into a number of technical and fundamental reasons for this trade, but if I’m really honest with myself, I can probably look harder and find just as many reasons to be bearish. No, this is more of a feel trade, where I think the market overshot at various times and will eventually move back towards long-term neutral levels closer to 1.20. As we well know, opinions are irrelevant and the only thing that really matters is timing, but at some stage we will get ‘lucky’.