Poised For A Stronger Directional Move

Corrective structures are always the bigger challenge compared to impulsive waves. They have more twists and turns, dead ends and often play tricks within a correction within the correction. It ends up requiring a suite of tools that can assist in warning that momentum is slowing at a time when key levels (whether given by natural support / resistance or my Price Equilibrium Clouds) are suggesting a resumption of the trend.

Why do I mention this? Because that’s the task for today although it will no doubt be provoked by tonight’s Fed’s Open Mouth Committee with Yellen yellin’.

In many pairs we are in the proximity of key levels. The European currencies have hourly divergences and are being courted by both hourly & 4-hour Price Equilibrium Clouds. The combination of these along with tonight’s expected verbosity there is a strong risk of fireworks. However, as usual, running into that event is likely to be dull though the reaction looks strong.

This should impact on all currencies but AUD/USD has already made its break. I have had to make some judgement calls there due to the exceptionally volatile nature of the past two weeks, and there could be a bit more following “The Pronouncement” but the basic structure does seem to have already been set.

As for the JPY pairs, the upside in both does still seem to have legs but we are closing in on some key resistance areas and these need to be observed with care. Certainly, EUR/JPY has been stronger than expected but still within a broad resistance range. Really, we need to stand poised to jump on a potential ride. If anything, it will be USD/JPY that could see modest gains during the day.

At the end of the day, the morning begins – at least for me because the yellin’ will come while I’m analysing first thing in my morning - and will probably have me pulling my hair out having to re-adjust levels…