Yet another basically neutral day, initially promising dollar losses but then failing to follow through. The fine lines are getting finer and the risk of alternative outcomes is becoming stronger by the hour. We do have the Fed’s interest rate decision today, followed by a press conference.
EUR/USD started the day as I had expected. USD/CHF saw the potential for a double top but the target hasn’t been met, while GBP/USD reached the general target area I suggested. Now comes the critical part – what will happen next?
I really can’t say that I am particularly confident of dollar losses anymore. While GBP/USD has an apparent decent bullish divergence, it hasn’t been matched by 4-hour momentum. EUR/USD has moved back lower to break last Friday’s low – even if by an extremely fine margin. USD/CHF appears to be dithering and trying to push in one direction – then the other – without actually generating any momentum.
Basically, we need to be prepared for anything in the Europeans…
The 0.7529 low in the Aussie held magnificently and managed to climb up a shallow hill as if it was an ancient old man. Perhaps we shouldn’t be too surprised because of the almost invisible Wave ii. Thus, there may well be further consolidation before it can poke its head above 0.7572 – by how much is the issue…
As for USD/JPY… talk about dithering like USD/CHF… it made a minor new low again yesterday – something I hadn’t really wanted to see. Still, it’s beginning to look a little more settled now and it would not surprise if it managed to poke its head above the recent peaks. EUR/JPY was driven lower by the lilly-livered EUR/USD. There are some signs of bullish divergences, but given the limp performance we’re going to have to follow the next break.
Care is still required until there is a stronger catalyst to signal a trend…