Wow… the market loves doing things the hard way… It really reminds me of the mess that developed in the middle of last year. These days, once the market has lost its mojo, it reverts into Serious Hibernation Mode, a factor of Obsessive Corrective Disorder that causes the market to shiver and quake so that it goes home to Mummy and cries.
Ok. That’s vented my frustration…
Despite yesterday’s weirdness, the structures just seem to have organised themselves to make the most of deeper corrections and complicated and intricate complex corrections. The general outcome still remains the same, but it's just taking a long winding path to get to its destination. So we are taking another diversion but one that should still eventually reach the same outcome.
The Aussie didn’t require a diversion. It simply moved back lower as expected. There is still quite a wide buffer within which bounces can occur. It’s one of those moves that needs keen observation to identify triggers for the next larger move. Thus, stick to the task in order to pick the right point.
I was rather in two minds about the GBP/USD although with an initial move lower expected. However, it broke below key support but that needn’t imply direct losses… Indeed, I tend to favour another push higher with price having reached support provided by the 4-hour Price Equilibrium Cloud. It needs confirmation to resume the upside. Thus, take care.
USD/JPY failed to extend gains and instead embarked on a downward path. This has been deeper than expected but from Friday’s high it still has potential for further gains. Like GBP/USD, the 4-hour Price Equilibrium Cloud is rising and supporting price and that’s my main preference for now. There are some clear target areas for any new high so don’t expect a significant rally. This may help EUR/JPY higher but the cross is in a really introspective mood and doesn’t look like making any sharp moves still. Thus, it’s probably best to watch for this move to end…