Market Procrastination

That was another strange day… Very clearly the market is not convinced about either direction and certainly not committed to any direction as yet. It was good that USD/CHF managed to make a minor new corrective low but the fact that EUR/USD could only muster a feeble retest of 1.2839 (precisely) is really quite puzzling. At the same time GBP/USD failed to establish an impulsive target which, in its current position, is a humdinger of a dastardly, devilish conundrum.

If I take the Continental Europeans as a pair they appear to be touching a (Dollar) projection high which will basically mean they have not really broken range. Thus, the reactions from there are going to be critical – shallow or deep is the question. If shallow then the risk remains for a higher Dollar else the chances will favour a recycling back to yesterday’s (Dollar) lows. So watch those areas carefully. However, this doesn’t provide an explanation for GBP/USD and it’s this which puzzles. Best take a neutral stance until the direction is clearer…

AUD/USD continued higher but in a rather slap-dash, untidy and crumpled manner. It tends to suggest a recycling also. However, this development does raise the possibility of a more bullish outcome but we need to see breaks to confirm either direction. Thus, once again note the levels on both sides of the market that will trigger follow-through.

USD/JPY slipped, and slipped again to threaten a resumption of losses. However, quite normally, it stalled just above critical support and looks to be pushing back higher. This should take it to new highs and with EURUSD expected to be firm, the risk is for EUR/JPY to be dragged higher too. In terms of the JPY pairs there is a terminal number of times it can push higher and these will be the last.

Overall, I think we’re much, much closer to a more directional break. However, take care until that break is confirmed…