On the whole, with only two disappointments, I was very satisfied with yesterday’s action. The two detractors were EUR/USD and USD/JPY. I opted for a move lower in EUR/USD that I thought would then need to reverse higher. It seems that it just decided to cut out the bearish detour and just take the easy road.
For USD/JPY, well I was caught by the horrendous mess in the rally from 100.09. Clearly I had misjudged that one, and the depth of the decline stalled (so far) only 15 points above the 100.09 low.
As for the rest of the gang, the swissie declined as expected. I had two alternatives, the first being a possible triangle and the other a more direct decline. Due to the wrong choice in EUR/USD, it seems that CHF elected for a move down the 0.9659 low.
In the meantime, GBP/USD did nothing wrong but still has a slight ambiguity – or more accurately - has two valid ways of completing this leg lower. There really isn’t much difference, to be honest, but don’t expect a whole lot of action in the pound. However, between the Europeans, we should see some further dollar bearish action today overall.
The aussie performed perfectly yesterday, having caught the lows, reversal and highs. You can guess the outcome for today…
While USD/JPY disappointed, somehow EUR/JPY managed a perfect recycling as I had been expecting. This should, theoretically, imply gains today that could come from both individual pairs. This appears to have a relatively identifiable target. The biggest risk is in USD/JPY – so just make sure that it develops as expected…
We should see a steady day today.