Overall, yesterday was a steady day with the exception of GBP/USD that decided to take up pole dancing – not that it managed any classy swings on the way up. It has, at least, cleared up the confusion of the ragged, scrappy decline and provided a more definite outcome that had been searching for. I wouldn’t be surprised to see it higher still but we probably need to cope with some difficult development beforehand.
Indeed, this seems to be a common theme across several pairs. Such was the relatively direct losses in the dollar that it seems to have been a little too enthusiastic and this will suggest some care during today so that we’ll have to wait patiently to observe the initial pullback to allow follow-through later today. I see this in USD/JPY, EUR/USD and GBP/USD in particular. I have some doubts about USD/CHF in this regard.
The Aussie is a little more vague – although followed my instructions in yesterday’s report. Watch the channel there.
EUR/JPY also performed well, following through from the recent losses so we should be hitting the targets I mentioned yesterday. The trick here will be the balance between USD/JPY and EUR/USD. Which will provide the stronger move versus a weaker one.
So today needs some focus and attention to understand the balance between the pairs and their limits.