Perhaps it should be expected but heck, this slow market is slowing down more. To be honest, unless some throat wrenching catalyst occurs, tomorrow’s Thanksgiving looks like seeing some painful range trading. Having said that, we should see some additional extremes. Well, perhaps “extreme” is not a great word, but “marginal break” looks more likely. Within the Europeans, it’s probably EUR/USD that has its limitations while both USD/CHF and GBP/USD do seem to have more potential for slightly firmer follow-through.
There was one outlier yesterday – AUD/USD – that baulked the dollar bullishness. It was a tight call but one that appears to have come right and perhaps more than right. By that, I’ve found the rally stronger than expected. We’ll have to be careful here because it tends to suggest potential extremes – any break above a key projection, or below a support could still lead this pair in either direction. Best take note of those levels.
The other pair that had a break down yesterday was USD/JPY. This is beginning to suggest a period of weakness – as I’ve mentioned SO many times – the 48 weeks cycle low is not very far away. It isn’t yet a done deal but be attentive to any losses. Even then, the decline in EUR/JPY reached its general target area. It should correct higher and much depends on USD/JPY to sway this one way or the other. Thus, best watch these two, combined with EUR/USD for the cross, and look to take advantage of both bullish and bearish outcomes in USD/JPY…
Once again, steady as she goes. It’ll probably be a slow day once again.