It may not have been an exciting day yesterday; for the most part, the market remained fairly steady to sideways with the exception of AUD/USD and to a certain extent GBP/USD. That may not sound like a constructive day, but we need these to form the base for further directional moves. While that foundation hasn’t really made any technical breaks – and that means we still have to proceed with caution – as long as we get the right break, we should begin to see a stronger trend developing.
This should provide the outcome I have been waiting for since quite some time, having been frustrated on several occasions – but maybe it’s best to actually see that confirmation because the market has been in the habit of fighting shy of actually generating a trend.
Where we have seen some veering away from the path I had expected – in EUR/JPY and AUD/USD – we need to establish alternatives. This appears set to begin in AUD/USD that pressed above the resistance areas I had expected would cap, but has two options now – and I suspect there’s a strong risk of the larger consolidation developing. This does tend to make sense in terms of the fact that it is in a terminal stage of a larger bearish structure while the Europeans are mid-way.
In EUR/JPY, there are two options as well – one being a new high, and the other being a short-term range trading scenario. Probably the former would suit the outcome in EUR/USD. Some care is required here. That USD/JPY remains with a steady, but pretty slow development, should continue, but there is still risk of a minor new low before it extends its rally.
Watch the key points today, and be prepared to jump on the back of a directional move.