Tuesday, July 22, 2014

More of the same…

I can’t say I’m too surprised about yesterday’s developments. Mild Dollar losses, nothing too exciting – perhaps even a bit dull given the lack of follow-through – but given the fact that price was battling with the (Dollar) bullish 4-hour Price Equilibrium Clouds, it’s probably exactly what we should have expected. What this does mean is that price needs to make up its mind whether it will make a clear penetration or resume the bullishness. This will be the focus over today.

Almost certainly Asia will maintain the status quo until Europe arrives at its desks, which could see further drifting like the fluffy white cloud that’s wafting across the sky now. That Japan will be back from their Green Day holiday will probably make not one iota of difference given the seriously sluggish development we’ve experienced for quite some while. However, what I have spotted is a potential issue when trying to correlate USDJPY, EURUSD and EURJPY. While I realised a small error in my count in the cross (but not one that makes too much difference) the upside doesn’t appear to suggest particular strength. Given USDJPY should be overall bullish, it tends to suggest EURUSD has limited upside. The resistance area in EURJPY is quite clear so I’d suggest watching this and for any reaction in either USDJPY and/or EURUSD. This will hopefully provide some insight into all three pairs.

The Aussie went into slow motion, mainly sideways but with a bearish drifting-lower bias. It could still suggest the support area I mentioned yesterday, but overall the observation of a recycling I mentioned yesterday does still seem to hold the main theme. It could well be a slow day again today.

Today, it’ll be important to note the key levels that could provide pointers to the next larger move, but like yesterday there does seem to be a bias towards dull trading once again.

Good trading
Ian Copsey  

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