The first half of Friday did indeed see the dollar looking weak but, sporadically across the pairs, did turn back higher in the second half of the day – even to see a new low in EUR/USD and in GBP/USD. It seems these two pairs have managed to squeeze a little more downside room for themselves while USD/CHF looked at them with disdain and remained below Thursday’s high. I’m just a bit frustrated with lack of decent movement but overall this does seem to imply that the dollar will be more uniformly weak today. As mentioned on Friday, the bigger puzzle is the depth of losses…
The dollar losses were echoed in AUD/USD also – even moving to quite a strong extreme. It should see losses resume today although I suspect in a rather languid manner. Long gone are the days when we had the firm downtrend from July 2014, a factor of the maturing of a 5-wave development. Thus, don’t expect decisive decline but a more steady - one and probably with greater erratic corrections.
I hadn’t expected USD/JPY to follow a bearish outlook on Friday but it did drift a bit lower, only to see the expected gains towards the end of the day. I’m not expecting anything close to a fiery day but more likely a two-way day with a bullish bias. This should, in conjunction with EUR/USD, see a recovery in EUR/JPY.
Limited, steady moves today… unless someone somewhere makes a dumb statement…