For the past few days we have seen a rather tense approach to a break level that could reverse the fortunes of the dollar. Friday’s sideways moves in EUR/USD and USD/CHF basically provided a fragile consolidation that has led to the 4-hour price equilibrium clouds to flatten out.
This prompted a deeper decline than I had hoped for in GBP/USD but hasn’t breached any key supports – except the 4-hour price equilibrium cloud – but ended up supported by the daily cloud.
Today should be quite an important day in that case and should show us which way the market wants to move… or perhaps it will continue the narrow sideways consolidation… I hope not… Therefore, we must be watching for the first moves today. That may well only begin in the European session, but we shall get a sense of what’s happening then.
It seems as if USD/JPY has still not yet formed a high and we’re likely to see further gains. This tends to suggest that EUR/JPY may also begin to make upward headway but could be bolstered more by EUR/USD – although this still needs to be confirmed.
The Aussie performed adequately and is still in a fragile position, like the Europeans, with it struggling to break above the 4-hour price equilibrium clouds but failing. However, I do feel it needs to press higher still but then tend to oscillate around the clouds – probably a little below last week’s low.
Thus, there is a limited range and probably slow trading that will be best to avoid. Instead, wait for the outcome.
Hopefully, we’ll see stronger movement later in the day…