Can The Dollar Stave Off The Bearishness?

What started out as a quiet day ended with a flourish - just about all round in the Dollar-currency pairs. So now the Dollar is pressing hard close to prior Dollar daily lows. Will it press on through or will it manage to stave off the bearishness? Good question. There’s certainly very little room for error here. Actually, probably none. The margins are just too fine. However, there are a few clues and these need to be followed closely today. Much depends on the initial reactions today and also on the depths of any corrections/ reversals. The alternative, direct follow through below those daily Dollar lows would obviously trigger further losses.

It’s on the Dollar bearish side where there are a variety of targets in terms of extent. That tends to put me off the Dollar bearish scenario but given the firmness of 4-hour bearish momentum it’s not something to ignore. It could resolve itself but, once again, it will depend on any correction and probably also the time taken. Therefore, the start of the day will provide crucial information to the potential outcomes.

The above applies more to the Europeans although the Aussie and USD/JPY do still have potential for Dollar weakness. The Aussie developed exceptionally well and is approaching another resistance level. Structurally it is on one of those positions that could see it reverse lower or merely correct. Therefore, we do still have to take note of levels that would push it one way or the other…

EUR/JPY developed almost perfectly also although the drop from the 142.09 high has been rather deep. This could hold some clues also with the next break being quite important. Equally, USD/JPY didn’t bother to extend its bullish correction and resumed losses directly. The downside isn’t done with as yet but there are a few clues that we can follow. Overall it remains pretty much in line with my general expectations here and thus keep in mind the key levels that would sway it one way or the other…

It should be a key day today so keep alert to the requirements in each currency pair…