Another good day yesterday, the Dollar extending gains towards the upper targets areas. The only detractor was GBP/USD but this was expected, having taken an alternative route to its eventual target. From this point, the outlook becomes a bit more complicated. We should be expecting two-way trading. Both upside and downside have their limits and therefore it will be important to note the anticipated extremes and judge your trades around these.
Price has moved some way from the 4-hour Price Equilibrium Clouds in EUR/USD and USD/CHF and I suspect we’re going to see the Clouds providing the barrier on any initial correction. From that point forward we’ll need to manage the next move, whether we’ll see a stronger move or consolidation.
As mentioned, the move back higher in GBP/USD was expected. It has taken its own route over the past week or so, turning its nose up at the Dollar strength. This is pointing to a larger corrective structure that could last for a little while yet with room for movement in both directions. However, these should be relatively identifiable so watch out for the expected extremes in a similar manner to the Continental Europeans.
The Aussie dropped like a stone earlier in the day almost promising a rout on the downside, but then corrected. It does still have some downside risk but there is a limit, so like the Europeans, Take note of the expected extremes.
USD/JPY extend gains nicely. I had begun to think that we may only reach the lower targets but it certainly looks like seeing the higher range. Even so, this too is approaching a more volatile period with more two-way trading. This tends to promise continued consolidation in EUR/JPY which has begun to lose its way. Stay neutral in this pair and favour USD/JPY and watch the limits on both sides of the market.
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Less Directional Today
Published 12/03/2014, 11:21 PM
Updated 07/09/2023, 06:31 AM
Less Directional Today
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