Yesterday mainly saw the dollar moving higher. I had expected for it to complete that move but it ran right through to this morning. I suspect that by European open we’ll have seen the dollar highs, or Europe will be tying up the loose ends for losses to develop.
This should see the dollar begin to weaken over today, perhaps into tomorrow and we’ll see how deep it can reach. This could also see the Aussie being lifted higher too. The question is whether it will reach 0.7777 or not. This will be the puzzle for the down-unders.
The bigger puzzle is in EUR/JPY. Yesterday saw a high at 120.44 and appears to have some way to go on the downside. With EUR/USD expected to rally after it’s additional low, it seems that USD/JPY may have to be the sacrificial lamb. It almost seems as if it could have a brush with the 110.10 low and I’d even feel that it could risk a new corrective low.
It doesn’t look like the Cross will be able to summon the power needed to cope with the downside without the help of USD/JPY. Take care in this pair. Any other alternative will require a break above 119.80.
Otherwise, I am quite satisfied with yesterday’s moves and the anticipated reversal lower in the dollar over today.