BofA warns Fed risks policy mistake with early rate cuts
Best of all calls yesterday was USD/JPY that reached target perfectly. That has encouraged the bullish view and at the same time dragged EUR/JPY by the scruff of its neck along with it. Having said that, the gains seen in the cross have been hampered by a softer EUR/USD although, as I mentioned yesterday, this was likely to be the case.
However, the cross does still seem to have further upside left in this part of the structure and thus, while USD/JPY looks to take a quick break from the move higher it does suggest that EUR/USD could take up the slack. I have to say, though, that there’s a fine balance between these three and it’s worth watching them all to try and extract clues.
If I look at the Europeans in isolation, yesterday’s dollar gains were very much within expectation but it does now need to sort itself out now and resume losses in order to keep the structure on track. I’d only add a small caveat in that a minor new corrective high may be needed before the overall downtrend resumes given that it has begin to consolidate and much more of it would make the internal structure difficult to absorb into direct losses. A minor new corrective high would wipe the slate clean and allow a fresh and more impulsive development.
Elsewhere the aussie sprang a much bigger surprise with the depth of its losses. It’s reached so close to the 1.0165 low that it does raise a few concerns. There is an hourly bullish divergence but only minor. It’ll therefore need careful handling to ensure that any reversal (hopefully) can be identified…
Elsewhere, the U.S. indices are also in a state of indecision and definitely in need of a catalyst to spark a more sustainable move… but perhaps that can be said of the dollar also.
However, the cross does still seem to have further upside left in this part of the structure and thus, while USD/JPY looks to take a quick break from the move higher it does suggest that EUR/USD could take up the slack. I have to say, though, that there’s a fine balance between these three and it’s worth watching them all to try and extract clues.
If I look at the Europeans in isolation, yesterday’s dollar gains were very much within expectation but it does now need to sort itself out now and resume losses in order to keep the structure on track. I’d only add a small caveat in that a minor new corrective high may be needed before the overall downtrend resumes given that it has begin to consolidate and much more of it would make the internal structure difficult to absorb into direct losses. A minor new corrective high would wipe the slate clean and allow a fresh and more impulsive development.
Elsewhere the aussie sprang a much bigger surprise with the depth of its losses. It’s reached so close to the 1.0165 low that it does raise a few concerns. There is an hourly bullish divergence but only minor. It’ll therefore need careful handling to ensure that any reversal (hopefully) can be identified…
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Elsewhere, the U.S. indices are also in a state of indecision and definitely in need of a catalyst to spark a more sustainable move… but perhaps that can be said of the dollar also.
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