The general expectation of less directional trading on Friday, proved correct. Interesting it looks as if we could see a similar type of today as we start the week, but almost in reversal of Friday’s moves. I wouldn’t want to suggest that this will be seen universally across the currency pairs, and not all in the same degree of move, but basically a general mishmash across them all.
From the Continental Europeans, I see an interesting correlated outcome in terms of direction – but not necessarily in extent. One requires an eventual dollar low while the other does not. This should keep them both generally confined to a range for the most part but much will depend on how energetic the market will be – sluggish or more direct.
The other European, GBP/USD extended losses quite solidly on Friday. I’m finding the lower degree structure just a tad difficult to identify the structures. With the U.K. General Election on Thursday, we may well find some nervousness ahead of the results that will be known on Friday. This could generate either a rather whippy market or conversely the “rabbit frozen in the glare of headlights.” Best be cautious. Currently both hourly & 4-hour momentum are pointing lower quite firmly…
The Aussie extended losses again on Friday. It’s due a correction with an hourly bullish divergence but note 4-hour momentum remains pretty bearish. That should provide the expectation for today’s outlook.
USD/JPY rallied nicely that helped EUR/JPY to extend gains but, as suggested on Friday, we may not see much higher. The 4-hour Price Equilibrium Cloud is just below current price and there’s a good chance it’ll rally to push price higher – but quite how much higher it can go is under doubt… This is likely to be fuelled by USD/JPY rather than EUR/USD…