After yesterday’s initial flash of fireworks on the open the market settled for a more pragmatic outcome; consolidation. Even the U.S. equities provided a similar outcome. Yes, there appears to be a likelihood of further dollar losses but keep one eye on the break levels. What we are looking at is either a final follow-through or a break higher in the dollar that will imply we have seen a corrective sequence. This applies to EUR/USD and in USD/CHF, the latter requiring a final zigzag.
As for GBP/USD, the day past away as if floating in the air with bubbly clouds and pretty birds that twittered their position, which wasn’t too difficult given the 65-point range. I still tend to feel that we should look to break levels. Frankly, yesterday’s flush rush in the other pairs seems to be an overreaction.
This also appears to be the need for further gains in USD/JPY given its incomplete structure. However, we’re close to a break lower so keep an eye on the downside if this breaks. This tends to suggest that EUR/JPY can also benefit from the influence from both parties, but once both pairs have done their job, we should begin to see a more straightforward outcome a reversion back to dollar gains.
Even that can be said of AUD/USD although it has the potential to develop in a consolidation.
So today * should * be a little more straightforward than yesterday and assuming the market begins to develop in a more orderly fashion we are likely to move back to the dollar upside by maybe today or possibly through to tomorrow.