Talk about fine lines… The Continentals hit precise levels that divide the upside versus downside. OK, EUR/USD was 1 point below, but I’ll not get too upset about that. Having said that, if I take into account momentum, I’d have to say that things are not looking up for a dollar bearish outlook.
This has given me a big headache, not only from these two pairs in particular, but if I include GBP/USD there is an added complication because it’s not that far from my target from where gains should develop.
In addition, moving back to USD/CHF, the daily structure will be totally out of whack. So, I’m sitting here trying to decide what is going to happen. Or… perhaps more constructively, I’m waiting to see which scenario breaks down and that means sitting on my hands and making a decision later when I see which scenario breaks down.
The day has begun and USD/CHF is slipping lower, EUR/USD is paralyzed and GBP/USD is exercising its stiff upper lip. If I am to make any suggestion then I sense that, most likely, we’re going to see a limited range day – or perhaps half a day.
The Aussie? Well, it performed like a trooper on Friday and bowed to my outlook and I expect it to continue to do so. However, compared to last year, momentum has slowed considerably and appears to have a more sedate development. The losses we have seen from the 0.7526 high have not been convincing and we may have to allow for gains today. This does tend to adhere to its recent, indecisive nature… Best, take things step by step…
As for the JPY pairs, USD/JPY stalled a little above my expectations on Friday to make steady, though not spectacular gains. If my outlook from just over a week ago is correct – and appears to be so – then we’re likely to remain in a range for some while with the bulk of the range still above current price. This should help EUR/JPY higher also, particularly today with limited upside in EUR/USD available to assist. Beyond that, I’d rather wait to make judgement until there is a stronger confirmation in the Europeans at least…
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