I was quite satisfied with yesterday’s developments. We have probably seen the Dollar lows and it’s not just the battle with the 4-hour Price Equilibrium Clouds that have been stifling the Dollar upside. This process still needs a little more time – probably into European and possibly North America also. However, I feel that in the second half of the day we’ll bust through the Clouds to generate a more directional move.
There is still a need to protect the Dollar downside – just in case. If there are any pairs that may see minor new Dollar lows then it’s USDJPY and – surprisingly – AUDUSD. The latter, the down-under pair, actually resolved the puzzle I had in the Antipodean. That it broke above 0.7740 provides us with a minor-ish follow-through to a new high.
As the day begins we should see a pullback to yesterday’s Dollar gains. The only issue is just how deep that pullback will manage.
Thus, take care over the Asian and partly European sessions but be aware of the break higher in the Dollar.