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Risk Of Consolidation At Some Point…

ByIan Copsey
Published 07/01/2015, 11:51 PM
Updated 07/09/2023, 06:31 AM

The week basically ends early today with tomorrow’s Independence Day break likely to subdue an already subdued market. This is amplified by the fact that the Greek referendum will be held on Sunday and therefore the risk on early Monday’s trading, when the results will come through, will not really encourage holding excessive positions. Hence the strong likelihood that yesterday’s dollar strength is likely to be pared back. In the U.S. equity market this process has already developed and is likely to be relatively lacklustre also.

Therefore, while there could still be dollar gains over today, the risk over tomorrow is for consolidation, potentially extended, until the referendum results are known. Hopefully this will instigate a stronger trend to develop.

In USD/JPY we are approaching key resistance where the market needs to make a decision. It’s not a clear-cut certainty on either direction but does have potential to make a break in one way or the other. Still, there could be a brief period of consolidation is quite likely in order to set up the foundation waves for the follow-through. I even see this in AUD/USD also which topped out as expected but does now seem to also need a correction.

As I mentioned yesterday, EUR/JPY has no opinion on its own and needs to be pushed one way or the other by either EUR/USD or USD/JPY but from what I see, there doesn’t seem to be much potential for a directional move tomorrow…

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