Had a few pretty good hits yesterday – the lows in EUR/USD, GBP/USD and AUD/USD within a few points and USD/JPY around 7 points. That’s really helpful because it tends to suggest that the outlook I have is correct. However, I’ve been in this situation before and suddenly had the market go haywire, so we’ll have to wait and see.
That brings me to today… What will happen? Well, we should still see the dollar weaken in general, but at this point there are first reversal targets, combined with the hourly and 4-hour Price Equilibrium Clouds that will likely keep trading restricted for at least half of the day – maybe a little more.
One point that I noted is that USD/CHF did not reach its ideal target. Perhaps we’ve seen a shortfall, but we may need to allow for further gains in this pair in the expectation of an initial limited range. So, the Europeans look like being subdued again today.
The Aussie completed its decline in early trading yesterday… but guess what? It has the 4-hour Price Equilibrium Cloud barring its way higher. Thus, it seems that while it has slightly wider wiggle room, it is only slight, and the outlook appears pretty similar to the Europeans.
So this just leaves the JPY pairs, but these appear to have more potential for the downside today, mostly driven by USD/JPY that, as mentioned above, stalled 7 points below my favored target. It would seem these two – more likely USD/JPY – will provide a modicum of movement, but with the attendant risk that it could be a choppy decline and not trending.
So, it looks like a mostly dull day and only towards the second half of the day – maybe into North America – that we could begin to see more directional moves…