With an $84 billion dollar shortfall in the Euro banks and the cloudy outlook on fed tapering next week, I expect an interesting and indecisive challenge for the USD. However, It seems to me the biggest currency moves throughout the forex market will be due to the outcome of Davos. Where they are seemingly hashing out ideas that include Euro-zone discussions with the UK and Japan’s expected tailwinds from inflation growth.
As for the Feds, I wouldn’t be surprised by a more fog and slag sort of response, rather than a gung-ho tapering message; mainly because Wally-Street doesn’t respond well to over eager Federal Reserve news.
My best guess right now would be a slow EU start upwards to 1.370, 1.371, 1.376 but I think for the most part it will continue to range between 1.370 and 1.367 at least until Wednesday.
My biggest question mark is UJ, does the dollar have the gumption to pull herself back up in light of the Yens new found ego and the cloud over emerging markets? Those spinning tops on the four-hour chart makes me believe she is going to make a run for it maybe even get back into the upper 103 range.
These of course are just the ranting guesses of a virgin speculator and I thank you for lending me your eyes temporarily!