Mixed Feelings: USD/CHF Fails To Perform As Strongly As Expected

Overall it was a good day yesterday, basically dollar bullish as expected and reflected in all dollar-currency pairs. It was only EUR/JPY that spoiled the party. After having analysed the range of currency pairs I have been left scratching my head. No, I don’t have an infestation of nits. In particular it is USD/CHF which puzzles because of the limited nature of the rally compared to the expected outcome. It’s possible that I’ve missed a beat, but overall this should be performing more strongly than we have seen. I therefore have an inkling that we should be watching the 4-hour Price Equilibrium Clouds that could provide support or resistance depending on the currency pair.

In all this, GBP/USD has been a bit of a mess, but basically bearish and yesterday saw a move close to one of its targets. I suspect some dollar weakness but I’m not sure we’ll see this being excessive – and that tends to concur with my thoughts on the Price Equilibrium Clouds.

Equally, the Aussie did well to extend losses but has, in the process, begun to forget about normal Wave iv retracements. This clouds the picture somewhat and therefore requires some due care and attention, utilising momentum and/or other indicators to guide the way.

As expected, USD/JPY made solid gains – slightly stronger than expected – although within the normal boundaries for this position. I see an hourly bearish divergence but no 4-hour bearish divergence. Normally, this would suggest a correction only. Having said that, it has reached within points of a key barrier and therefore we’ll need to exercise caution in this next move. That EUR/JPY has little upside room spare after its deeper than expected recovery but should continue its decline. The question is whether EUR/USD or USD/JPY provides the driving force… or may be both. I do find some conflict in this threesome so this is yet another area to watch with care.