A Steady Start To The Week

Friday’s Non Farm Payrolls registered a low level of seismic activity that should maintain the current steady development that is being seen across the currency pairs. There are no significant signs of an imminent reversal in the dollar but more of a series of lower degree 2-way development. Having said that, there are indications that a stronger directional move is not too far away. At the same time, the 2-month cyclic aberrations are set to continue for another 1 or 2-weeks more. This cyclic environment has caused some extremely unusual structures that shift a beat from time to time and greater levels of noise in both lower and higher degree waves. It will be prudent to maintain your guard and take profits when seen, or if you are not confident of a trade then just let it pass…

As the week starts the landscape looks a bit nondescript. Currently the very short-term outlook appears dollar bullish in the Continental Europeans while the market has been buoyed by the U.K. general election and looks more like extending gains. The combination of the structures in EUR/USD and GBP/USD do seem to suggest that over the course of this week that we’ll see new highs.

The Aussie doesn’t seem to feel that comfortable with the downside but has been my preferred direction. The past three days has seen a slow, swinging decline. It’s now time to show its intent…

Equally, if the Aussie has been sluggish over 3 days, USD/JPY has been a complete pain in the backside for 2 months. All I have seen is corrective structures on both sides of the market but without forming a larger corrective – or impulsive development. It remains a complete conundrum and one that needs a break of range to trigger completion of a corrective pattern although with the risk that it heads off in the opposite direction. Thus, watch your backside with this baby.

If there could be any clue to the finale of this 2-month cycle of destruction, it may come from EUR/JPY. It looks to have baulked at trying to push above the 11th February high at 136.68 although hasn’t confirmed the reversal lower. However, should that occur we’re likely to see some ‘probable’ corrective behaviour.