Dollar losses in the Europeans was my favoured outcome although there was a slight shimmy in the early development but one that hasn’t altered the basic outlook. That EUR/USD and GBP/USD actually moved in tandem makes me wonder whether this is a permanent return to being buddies but I do have a few doubts. In the immediate expectations it does look likely.
While yesterday’s moves were constructive we are still in a position where it can still break down so there remains a slight risk of reversing yesterday’s moves. However, it does seem to me that we’ll see follow through today. The early risk may well be a period of consolidation. After all, that’s a general 80% probability being that Asia rarely sees any significant moves. But as long as we see the range in Asian trading remain limited the odds do seem to favour the Dollar downside again.
I am now less certain about the Aussie. In some respects there hasn’t been a break down in terms of break below 0.9213 but yesterday’s low at 0.9217 is just a bot too close for comfort at this particular section of the structure. Would prefer to remain bullish but this development does raise a flag and one that needs management. Effectively yesterday’s range appears to provide the markers for follow-through in either direction.
USD/JPY had a stronger day than expected. A level I thought had satisfied an important projection was actually not the intermediate projection that later occurred at 102.97. Thus the rally has stretched higher than I had been expecting. Nevertheless, there are signs of momentum slowing so today could see the preferred outcome. This rally in USD/JPY along with the gains in EUR/USD had a stronger impact on EUR/JPY that reached my target and then exceeded. I am slightly cautious on the cross now. Much depends on USD/JPY and whether it has seen its final high. Thus, a little care is required with the need to understand where one scenario breaks down and a new one begins…
Today should be similar in its steadiness. I don’t expect huge moves and therefore don’t try and squeeze too much out of the market.