Equity markets dropped sharply yesterday across the board. Oil rallied strongly, gold also rose. Why? Most likely because of fear of military action in Syria, which drove up oil prices.
Today is another speech by BOE Governor Carney. This is likely to bring major volatility to all the GBP pairs (as it in early August following the interest rate announcement). The market is still trying to gauge Carney and this brings about a lot of volatility.
CHF and JPY rallied across the board yesterday – I guess this is because they are considered as safe havens in times of uncertainty (i.e. the Syria situation). Particularly JPY has been strong.
The overall rankings reflect this. JPY is now in par with USD and EUR, it is therefore climbing up the ladder.
Thus now only two pairs exhibit strength/weakness combinations – AUDCHF and EURAUD. Neither of these pair have shown significant retracements.
It takes patience to analyse the market like this and to not take any action. There are no setups so I will not enter any trades.
What would I expect if military action commenced in Syria? I would expect equity markets to rally, gold and oil and Yen to decline.