Monday, August 29, 2016

Thrifty Thursday, Freaky Friday

You gotta love the market. The last two days of last week were in stark contrast - boredom versus frenetic. It wasn’t the exact pattern I had expected and has caused some minor changes, particularly in USDCHF, but in terms of the bigger picture it hasn’t really changed things except for the diversion we have seen. It just makes things a little more complicated in terms of correlations – particularly in the Europeans. From that perspective, I’d prefer to see confirmations of my expectations over today to ensure that I’ve interpreted this twist correctly. Basically, I can’t see that we shall see rabid Dollar gains today.

This is much the same with AUDUSD that followed the European template – a deeper pullback and then a panic at the end of the day. Like the Europeans, it hasn’t changed the structure at all – just the deeper initial recovery but then the losses I had been looking for. So basically, it looks like the Aussie and Europeans are basically correlated.

Now, where there has been change is in the JPY pairs. For the past week I had been very cautious about both pairs. I had/have my final outcome in mind but was uncertain of whether we had seen the lows in USDJPY in particular. In some ways, we haven’t yet really seen confirmation but I’m pretty certain of what is now happening. However, in EURJPY that had been fussing around a bit and causing some ambiguity, Friday’s push higher has changed things a bit. It has certainly broken the structure I had been considering but this just changes this into an alternative corrective pattern. This tends to resonate across the Europeans and with USDJPY also but suggests continued complications in the cross that should last for a week or two at least.

I can’t see Friday’s Dollar gains begin excessive today.

Have a profitable week
Ian Copsey  

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