It was a rather slow and ponderous day yesterday - but quite constructive. There’s every chance that we may well see a similar type of day today, generally dollar bullish but not with any great energy. There’s not a lot of additional information I can suggest given the languid nature of the market right now. I never really look at fundamental issues but just checked to see if there could be any specific catalysts that could accelerate the progress. Doesn’t look like it…
As a general observation, I am noting that the dollar is beginning to break above the 4-hour Price Equilibrium Clouds – so basically constructive – but much depends on the pace of the proceedings. It could even later end up swinging around these Clouds. If there is any one European of which I’d suggest taking more care, then it’s GBP/USD. A strong 4-hour bullish divergence is developing although hourly momentum is still a bit soft. This could actually develop a sideways range today – but just keep that 4-hour bullish divergence in mind.
The Aussie paused for thought. It may just keeping thinking. I don’t have great expectations here either but may buck the dollar bullish outcomes in the Europeans. It would not surprise me to see continued sideways development followed by another push higher.
USD/JPY… asleep but still in a vulnerable position. Currently it has the potential for another new high but I sense there will be a new low. It is beginning to develop a 4-hour bullish divergence. It’s not quite there yet, so we should see a new low but like GBP/USD this will need some due care and attention. This outlook is echoed in EUR/JPY but I’m not sure it’ll all happen today.
So today doesn’t look spectacular and probably quite dull. However, out of all the pairs, it’s GBP/USD and the JPY pairs that have potential for some surprises in the not too distant future…