That was a bit of a mess of a day. Certainly, for the bulk of the day, the market seemed to be repelled by even the thought of trading. We saw a marginal new low in EUR/USD and marginal high in USD/CHF. Momentum conditions seem to favour the dollar downside but there are no clear and obvious indications. However, from the structures the risk appears to be for dollar weakness today and this reflects the general outlook from the Europeans and Aussie.
In contrast, USD/JPY has its own thought process it seems. I can’t rule out dollar losses – at least not by too much - but we do have the 4-hour Price Equilibrium Cloud rising but will need to break above the hourly Cloud. The underlying implication of the structure does appear to be higher overall. However, it’s not all about USD/JPY. Obviously we have to consider EUR/JPY also that drifted lower for most of the day and there’s still risk of further losses – but being in a corrective phase there is risk of more complex corrective structures.
I’ll add that the dollar Index survived and pushed higher still. That said, it is approaching the 97.48 corrective high and being the recent swing high this also tends to suggest that we’ll see a peak and reversal lower.
Therefore, unless all dollar resistances are breached, there appears to be a general dollar bearish outlook today…