The dollar extended its correction against the Europeans, overall in line with general expectations in the EUR/USD and the USD/CHF. However, the GBP/USD went ballistic to approach the higher target areas that I thought wouldn’t be reached. Indeed, I can’t see that we have reached the dollar lows overall but suspect it may be possible today unless the market goes into serious under-drive. Having said that, the first part of the day looks as if it will perform its customary consolidation during the Asian session so we’ll have to wait for Europe for any follow-through to develop. I can’t even see any strong reversal indication from momentum either. Perhaps the Asian sleep session will help us out but at this point, unless we see a major catalyst, the current underlying direction remains dollar bearish. The same indications are reflected in the dollar Index also as hourly is momentum digging into the ground. So, don’t try and get too bullish yet.
The Aussie had a quiet day, but still reflects the same outlook as the Europeans. However, here both hourly and 4-hour momentum are slowing and developing bearish divergences. From the ratios there still seems to be further upside to come, and I suspect that the 4-hour bearish divergence requires just a little bit longer to become firmer.
That just leaves the JPY pairs that failed to extend gains as I had been looking for. Instead, they fell into a sideways consolidation that later turned a bit bearish in
The Aussie had a quiet day, but still reflects the same outlook as the Europeans. However, here both hourly and 4-hour momentum are slowing and developing bearish divergences. From the ratios there still seems to be further upside to come, and I suspect that the 4-hour bearish divergence requires just a little bit longer to become firmer.
That just leaves the JPY pairs that failed to extend gains as I had been looking for. Instead, they fell into a sideways consolidation that later turned a bit bearish in
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USD/JPY. There appears to be a small struggle here in terms of structure, but I can’t really see too much downside. I suspect a low will be seen today, but there’s a risk it won't really be noticed should the foundation stages of the next rally get bogged down. However, at this moment it looks like the EUR/JPY needs to see a deeper correction. So it’s unlikely that the upside is going to resume any time soon. Perhaps, that will need to wait until the dollar makes its stand against all the majors.Which stock should you buy in your very next trade?
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