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A Fiddly Market: Higher Than Average Ups And Downs

Published 07/07/2015, 12:47 AM
Updated 07/09/2023, 06:31 AM

Massive gaps on the weekly open almost always cause problems due to the lack of information. There remain a few minor issues, but overall, looking across (generally) correlated markets, a more consistent outlook is developing, which should begin to develop into a sustainable trend. Of course, the current problem is the high level of fiddly development - higher than average "ups and downs” that make the process of identifying the key wave endings far more risky. It can also generate more complex corrections – irregular corrections, congestion areas and recycling. I have even noticed (particularly in USD/JPY) much, much deeper retracements than normal. They don’t break any rules, but are definitely at extreme levels.

So, patience is required until the market has the confidence to fuel the next trend. Will that happen today? Maybe. (Refer to the above…) However, overall, the outcome should be just as envisaged yesterday and as this continues, we should find the market beginning to understand that we’re due a decent trending move.

As a background note, the U.S. indices (following their drop) have developed particularly well over the past few days, and we should begin to see some stability develop. If so, it would end to suggest that the recent uncertainty in the market (which has been anticipating the crash in the U.S. markets for far too long) should begin to become calmer for a while

Out of the pairs, I’d suggesting putting more focus on EUR/USD, USD/CHF and AUD/USD… The other three I cover have more introspective development at present, and thus are more subject to whippy moves.

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