Oh my goodness, that was a painful day. It’s almost as if the market needs a dose of Prozac to counter the almost depressive development. I can’t say the Europeans went quite as I’d planned, a recycling in EURUSD and USDCHF and a lackadaisical GBPUSD that couldn’t quite wake up all day long. Despite the very forgettable day, I still feel the basic expectation I have been carrying still tends to look more likely. We just need a little more enthusiasm from the market. However, we appear to be stuck in slow-motion so quite how this will all play through is a little difficult to judge.
Thus, the preference is on the Dollar downside in general. This covers the Continental Europeans and maybe Aussie although the Antipodean, following its grudging (but expected) recovery, does have its own agenda. The puzzle we have is whether the correction is complete. Should today develop in a similar way to yesterday, in terms of almost non-directional momentum, we could be in for another similar day.
GBPUSD appears to be the one that could buck the Dollar bearish preference. It did make downside progress, but as slowly as a sloth… I suspect this will still edge lower but I wish someone would poke it with a sharp stick.
On the whole, USDJPY did very little also although to the latter half of the day did lose out somewhat. It hasn’t really stated its intentions yet and remains in a tight range that still provides options on both sides of the market. In terms of any potential downside, the sheer lack of interest on the downside does seem to suggest a new high but I’d rather remain neutral at this point. That EURUSD dragged EURJPY down was useful given the cross needed to lose out. It should make further gains today but in the slightly larger picture the risk is more for two-way trading. Once it has satisfied the current bullish expectations we should be expecting losses to resume.
Like yesterday, we’ll probably be feeding off of scraps but a scrap is, at last, better than nothing at all…