…And I’m not talking about the chocolates. Actually, it’s probably not the black hoodoo either. I’m just observing the extremely erratic nature of recent developments. In particular, we have seen more than excessive moves in the JPY pairs and in the Europeans a mix of confusing, abnormal, volatile and almost nomadic development. I have been waiting for this month because I see it as a critical turning month. In particular, the levels we have been seeing in USD/JPY are those that I forecast from the 125.85 high. The young new traders in J.P. Morgan, where I gave some training one year ago, were boggled when I told them of my expectation.
Now we are in that price area and timing range, we are in the final stages of what has been an eclectic decline. It seems reasonable to expect some erratic behaviour. AUD/USD has already topped out. I’m not yet convinced that the JPY pairs have completed their decline – although they have both generated daily bullish divergences. Neither am I convinced that the Europeans have found their dollar lows – although yesterday’s outside day reversal in GBP/USD is a concern, as is the bullish hammer in USD/CHF.
I can’t see that we’ve completed a valid structure across the Europeans yet and I have an ideal dollar turning point the week after next. With yesterday’s volatility it is looking like we need to hunker down and keep trading sizes to a minimum, maybe remain square, because this market appears skittish and uncertain. At such a cycle turning point it – just look at the weekly chart of USD/JPY – we are clearly in the final tornado that will risk whips and lashes.
Today is not a day to trade on a whim…