Plenty of indecision to go around. This is what it looks like
Just when it looked like pain was coming
The past few days in equities have raised some red flags. The lower-than-expected CPI report should have been a tailwind for stocks. Instead, after a strong open they crumbled. It was like the ever-present dip buyers had vanished.
Then today they reappeared even after a terrible China retail sales report and rising energy prices that will hurt demand and raise central bank risks.
I think GBP/JPY is a good illustration of a market that's feeling whipsawed today. The pair broke to a one month high yesterday only to reverse lower. The drop continued early today to a two-week low only to reverse and now the pair is down just 2 pips on the day.
If you zoom out on the chart, you can see that we've been in a period of consolidation for awhile. Given this price action, I don't think we're ready to break in either direction just yet. But when it comes, it's going to be a big move.
Sept 22 is a day to circle on the calendar with both the PBOC decision and the FOMC.