I’m not too surprised with the way things developed – not that I had firm targets but did expect marginal Dollar lows before a reversal back into range. This has provided some constructive information - although not uniform across the currency pairs. There remains a certain ambiguity about the market, a sense that not all currency pairs will follow a correlated course. As such it does warn of some complicated development to come. However, for the main part it does seem as if we should see further Dollar gains after yesterday’s reversal.
EURUSD and GBPUSD appear pretty set, even if I had to adjust the count in GBPUSD which actually unravelled nicely as I looked at the broader daily development. These two should move hand in hand. However, I’m not quite so convinced that USDCHF is going to play ball and it’ll be prudent to watch key support/resistance areas that will tell us more about the next move.
AUDUSD, as discussed in the video outlook, had two options and took the alternative of a new high. This development raises the alternative – that we’ll not see consolidation. Thus, watch that carefully for signs of a more directional move.
While EURJPY sorted itself out, USDJPY continues to underwhelm. Its structure over the past month has been horrendously strange and really doesn’t generate much confidence. I’d suggest concentrating on EURJPY and EURUSD to get an idea where USDJPY will go. Basically I think EURUSD will drive the cross and we’ll have to work with breaks in USDJPY…
I can’t see easy moves today – and probably through the week – and therefor focus on short term trades.