A dollar bearish day. Not that it had much momentum behind it, but modest progress at least that edged price across the 4-hour Price Equilibrium Clouds. Having said that, there has been no significant break so there’s a risk of the Clouds acting like a sticky flytrap that will keep attracting moths back to the Clouds. We should see follow-through but I’m not too sure that it’s going to trigger a significant move, particularly as we’re going into a long U.S. weekend.
If there is any puzzle, it’s the slight disconnect between EURUSD and USDCHF in terms of the larger structure – but that has been a pattern of note for quite some while. I can certainly see that trend continuing. Out of the three Europeans it has been GBPUSD that has been most consistent. It’s not the easiest of pairs to follow but currently it’s basically plodding a long, marking its way but with a slightly better trending move compared to its soon to be ex-partner. I still feel it’s an important currency pair because it is in a different part of the structure compared to the Continentals and this could help identify common reversal points.
AUDUSD pulled back deeper than I had wanted. I suspect this was due to my conservative outlook but now appears set for a deeper target.
The JPY pairs whipped back down, then whipped back up and then became dizzy. In particular, EURJPY made a rather strange decline that has made me step back in order to observe. The “offending” action was a very deep pullback and followed by a minor new low but didn’t look constructive. There seems no doubt that USDJPY will move lower but it is probably better to let the next move develop to confirm my suspicions – or not – as the case may be…
A bit of blurb from Meddlin’ Yellen tonight. Not sure it’ll be of any substance but watch out – we do have a puzzle in the U.S. equities…