The story of yesterday was the 1-point break above the prior 111.86 high and a walk off the cliff face. As it dropped it didn’t even have time to notice that there was a double top as the bungee rope uncoiled. However, we should have seen the current low – or maybe a minor breach – to allow the rest of the day to urge it gently higher. Of course, it’s the start of Golden Week – of which I have pleasant memories of a few days break – and therefore the market here should slow down over the next few days and probably a bit more. That EURJPY was obviously dragged down with USDJPY can hardly be a surprise with EURUSD expected to make upward headway, we are likely to see the cross recover along the way.
The Europeans have seen some choppy behaviour but I suspect a degree of acceleration – not too much – to maintain the Dollar downside as we go into the weekend and on Monday come out into May. These next 2-3 weeks are going to be interesting following the past year’s sideways daily consolidation. The signs are that in the equity markets also and I feel we’ll need to exercise some patience within the general market overall.
The Aussie’s sharp losses over the past couple of days have stalled as expected and should make upward headway but in a rather erratic manner. It’s probably best to just observe for now and wait for the right moment to re-enter the market. In corrections the Aussie can be brutal…
Steady but slow trading as we go into the weekend.