I found things rather disjointed yesterday. There were parts where things went well but in other areas it became rather messy… even weird. To begin with, EUR/USD did at least extend gains but pushed above my favored target, but not beyond deeper projection targets. During the process, GBP/USD saw a deeper correction than expected but then poked up to a new high… by 1 point. This should mean that both EUR/USD and GBP/USD should move in tandem today – much as I had been suggesting in yesterday’s report.
Out of the Europeans, it’s USD/CHF that appears to be floating in the clouds without any real directional sense of where it wants to go, apparently detached from EUR/USD at this point. I still keep a balanced view on this pair – it has options on both bullish and bearish outcomes. This will be a “wait and see” project for now.
The Aussie provided a perfect outcome. This is quite an encouraging pair and may well provide a decent trend from this point. There’s risk of some early dilly-dallying early in the day but watch for the break…
As for USD/JPY… well, I’m pretty confused with the losses we saw yesterday, breaking below my support and broadly maintaining a downward path and with both 4-hour and hourly momentum heading lower. It could be just providing a larger consolidation but we’re close to breaking support. The possible controlling factor is in EUR/JPY but there’s a fine line between bullish and bearish at this point in both pairs. This needs some stronger hold on the structure, which I find a little ambiguous – but in the larger daily picture the downside does look negative.