It was a strange day yesterday - some good news and some slight variations that indicate an inconsistent outlook. The easiest to note was the divergence between EUR/USD and USD/CHF again. The euro made a new high as expected, the Swissie did not. The euro corrected slightly lower while the Swissie has reacted more aggressively on the upside. It’s this development that seems to place the Swissie into a larger sideways consolidation but should still leave the euro much as I described yesterday. As for GBP/USD, the risk of new lows still cannot be discounted and perhaps is actually preferred.
Thus, the Europeans present a mixed bag of reactions and the growing probability of several days of “busy doing nothing.” I even feel this may apply to AUD/USD also. That recovered, as I had hoped, but how it slots into the bigger picture is a different matter. The recovery seems to be inconsistent with upside projections and thus poses the suggestion that it will fall in line with the Europeans.
For the JPY pairs, this all seems to makes sense. USD/JPY requires a slightly deeper correction lower while EUR/JPY, a minor new high – the aura of confused trading does seem to extend throughout the currencies I cover.
The U.S. equities struggled to extend gains yesterday, with only the DOW making a marginal new high. The general drift appears to be towards a firmer dollar and mildly weaker equities and this looks as if it can last … well, maybe the entire week and at the shortest Wednesday/Thursday.
So, take things as they come. Take profits when seen and don’t try to hang on to positions for long periods.
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A Few Clues Suggest Extended Consolidation - Again
Published 01/15/2013, 03:59 AM
Updated 07/09/2023, 06:31 AM
A Few Clues Suggest Extended Consolidation - Again
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