Close To An Intermediate High
Ian Copsey | Jul 06, 2012 03:41AM ET
It has been a good week and while all moves have their temperamental moments these have been minor. As we go into the weekend the dollar has approached the intermediate targets I had set and if all goes to plan these should be met by the end of the day. That’s not to say that all currency pairs have been crystal clear with their moves with USD/JPY playing mind games, breaking highs but lacking follow-through. Obviously with EUR/USD collapsing this has dragged down EUR/JPY which has been my preference. GBP/USD has made further downside progress but remains within a rather clouded structure while AUD/USD baulked the trend and edged a little higher…
So what’s to come today? Well, I don’t expect the same tempo of follow-through today but more a slower pullback and follow-through to allow the dollar to approach the June 1st highs in EUR/USD and USD/CHF but from there the market is more likely to sit back and think about what it wants to do next. What will it want to do? I still think that buying dollars has become a favored preference…
At this point I’ll mention the U.S. Indices that have held up particularly firmly during the strength of the dollar. That has been a bit of a surprise to me and may point to a different structure and the potential for a sideways consolidation. I certainly don’t expect them to push to new highs but perhaps react in a more subdued manner to the focus on a stronger dollar against the Europeans. Over the coming 1-2 months that could be an interesting development and one I shall watch closely.
Thus, for today I expect a generally much slower day, an early pullback and later follow-through in the Europeans. I’ll remain open to developments in USD/JPY given its reluctance to take advantage of the break above 80.00... I do think it’s time the aussie joined in…
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