There were some good outcomes, some reserve outcomes and others that didn’t work so well – not badly – but do seem to have clarified the structure following Friday’s sharp reaction following the NFP. This is still in the fledgling stage and still needs some stronger indications. However, that the currency pairs are all basically pointing to the same outcome does provide a higher level of confidence. Momentum is also providing some supporting indications to confirm expectations – both in hourly and 4-hour charts. As for the Price Equilibrium Clouds, we currently have relatively neutral positions at this point in the 4-hour charts and mixed indications from the hourly charts.
This should see the day begin on a modestly cautious track although the Asian session is hardly likely to set the market on fire – but likely see the dollar edge higher. From there we need breaks to confirm the next direction. This relates to the European currencies in general.
The Aussie corrected higher more deeply than expected but has clarified the structure following the rush lower on Friday. This should set us up for the next leg but there is a relatively wide range from which we can expect a trend to develop. Right now it’s in a neutral position with price oscillating around the hourly Price Equilibrium Cloud. A break of the extreme could provide the next directional move.
Finally, on to the JPY pairs, USD/JPY surprised with a deeper bearish projection than I had expected but hit a projection target on the dot. This tends to suggest a correction higher but we also have to note that EUR/JPY, while being pretty mixed, doesn’t appear to have a huge margin above current price. Some caution is suggested in that case…