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Dollar Gains, But Limited

ByIan Copsey
Published 03/02/2015, 11:21 PM
Updated 07/09/2023, 06:31 AM

Following Friday’s shift, particularly in EUR/USD, the impact of Friday’s economic releases has been subdued. Of course, as mentioned yesterday, this was expected and I can’t help but feel that we should see a similar day today. There are relatively close Dollar upside limits which, while making new highs, shouldn’t be particularly robust. This also seems to promise, not only some rather choppy development, but also limited ranges that suggest profit taking is going to be the better approach.

In the early half of the day it could suggest some consolidation before the Dollar begins to perk up a bit against the Europeans. I have also come to the conclusion, having seen GBP/USD dip marginally below my key line in the sand, that the 1.5551 high was quiet a strategic high. Thus, expect this to take a walk down a winding country road for a while to come.

The Aussie may well provide a better directional move although there will be pit stops along the way, but momentum is overall bearish and this does seem to suggest losses continuing to see the Aussie supports erode one by one.

Having said that about the Aussie, I think perhaps the strength in USD/JPY is beginning to wane and look for weakness. However, it will have to go through the foundation building to provide the downside targets – so probably it may not react too much today. This tends to suggest that EUR/JPY could be the better vehicle with EUR/USD and USD/JPY expected to move lower – at times in tandem with each other. Watch for those opportunities.

Today will probably be similar to yesterday but perhaps in reverse.

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