Goldman Sachs speculative trading indicator hits record high
It seems we saw the languid conditions I feared although the outcome does appear a little different than I had considered yesterday. Having said that it’s not a drastic difference but more one that suggests some minor new corrective highs in the dollar before the current decline in the dollar resumes. We’re probably still a day or three (depending on how energetic the market is during these final days in August) away from what I think will be a more crucial and longer lasting dollar low that should spurn the resumption of the daily uptrend.
However, before getting too excited about the prospect of a stronger daily trending move we need to navigate the final stages of this daily correction. The prospects are for a dribble higher over the first half of the day and I suspect we should see a reversal, probably in U.S. trading to begin the final legs in the move from 1.2041 EUR/USD and 0.9771 USD/CHF. This general expectation appears to be echoed in GBP/USD.
Probably the pound is the more difficult to judge in terms of its upside potential. Yes, it is a larger retracement and we can look at standard retracement ratios but this has the potential to stall in-between levels and thus we’re going to have to wait for the last leg to fine-tune the target through common ratios.
I have a feeling we may see the aussie recycling but not by too far.
USD/JPY has remained as elusive as ever. Probably the stronger guide we can use is the cross – EUR/JPY – although this looks like being a rather rough guide given the recent erratic nature of its development. I suspect it should edge higher eventually but still remain below the 99.18 high.
The problem in between is the depth of any pullback lower and by how far, whether it can expand then recycle higher or even just drop straight down. The latter will require USD/JPY to lead the way but it’s not my favored alternative. Thus, the cross is probably best left alone and instead used as a barometer to the balance between USD/JPY and EUR/USD but with the underlying expectation for the cross to resume losses before too long.
Thus, another cagey day initially at least, but watch out for the dollar to resume the current daily bearish correction.
However, before getting too excited about the prospect of a stronger daily trending move we need to navigate the final stages of this daily correction. The prospects are for a dribble higher over the first half of the day and I suspect we should see a reversal, probably in U.S. trading to begin the final legs in the move from 1.2041 EUR/USD and 0.9771 USD/CHF. This general expectation appears to be echoed in GBP/USD.
Probably the pound is the more difficult to judge in terms of its upside potential. Yes, it is a larger retracement and we can look at standard retracement ratios but this has the potential to stall in-between levels and thus we’re going to have to wait for the last leg to fine-tune the target through common ratios.
I have a feeling we may see the aussie recycling but not by too far.
USD/JPY has remained as elusive as ever. Probably the stronger guide we can use is the cross – EUR/JPY – although this looks like being a rather rough guide given the recent erratic nature of its development. I suspect it should edge higher eventually but still remain below the 99.18 high.
The problem in between is the depth of any pullback lower and by how far, whether it can expand then recycle higher or even just drop straight down. The latter will require USD/JPY to lead the way but it’s not my favored alternative. Thus, the cross is probably best left alone and instead used as a barometer to the balance between USD/JPY and EUR/USD but with the underlying expectation for the cross to resume losses before too long.
Thus, another cagey day initially at least, but watch out for the dollar to resume the current daily bearish correction.