Nearing Some Corrections

Apart from the Aussie, there were no particular surprises. In fact, the rest developed exactly, or close to, expectations. As the day starts, we may have seen some temporary Dollar bullish extremes. I have a preference for another leg higher but at this stage, with the 4-hour Price Equilibrium Clouds supporting the Dollar in relatively firm bullish angle, the risk of a direct break lower appears negligible. The hourly Clouds are already mixed with price oscillating around them. Therefore, we should see some upward pressure on the Dollar and we’ll have to see where this takes the Dollar. There are no strong hourly bearish divergences at this point.

GBPUSD is much in the same boat although with both hourly & 4-hour Price Equilibrium Clouds beginning to flatten while 4-hour momentum is sporting a juicy bullish divergence. Hourly momentum? Oohh, maybe… but it’s not a strong divergence. However, I do think there are some clear break points that could help us out.

“Apart from the Aussie…” ‘Boomerangs’ tends to be the word that comes to mind. They swing around in the air and curve back. That destroyed yesterday’s action but it certainly looks as if it has developed a lovely irregular descending triangle. We should see losses today but it will require some time to build up the foundation waves to launch a push lower. This suggests the potential for a move lower but we may find this could be, perhaps, sort of, more likely to muck around a bit first…

The JPY pairs extended gains but both seem a bit jaded. I wouldn’t rule out new highs but I don’t think we’re going to see excessive upside – at first anyway – and I sense that the correction we should see is more likely to be one of those that consolidates rather than make up its mind to resume the trend. This tends to be the case with EURJPY also, except there could be a firmer influence from EURUSD impacting on the cross. Like USDJPY this tends to suggest a scrappy affair but probably one that sees a modestly firmer correction lower.

A day for patience but also being aware of the limits both sides of the market.