The dollar made further gains on Friday as expected, although without much intensity. Equally, the strength in USD/JPY began to wane and if it sees much more downside will see it release its grip on the spectacular gains over the past three weeks. Therefore, the start of this week looks like it will set the tone for the rest of the month.
The Europeans gave up the strength they had shown on Thursday. As far as I can see, this doesn’t look like a trending structure. I do have some doubts in GBP/USD that failed to capitalise on the gains it has made since the 1.6051 low. It has some possible trending qualities but hasn’t actually cemented the structure yet. Therefore, the start of the day is going to prove to be important for the next move. For the Continentals, there are some questions going begging and they need to establish their intent quite soon in the day.
I could probably “lump” the Aussie in with the Europeans also because it seems to be facing its own decisions. Indeed, I see a certain correlation between them so we could see quite a coordinated outcome for all four of these currency pairs.
USD/JPY must either make another rush for the bullish door else it’ll suddenly see the rush of blood to the head begin to drain. Certainly, I do see the need for further slippage in EUR/JPY, not by a large amount, but the rest of the drop could become a little choppy.
In summary, it looks like a rather dour start to the week and while I am expecting some interesting developments overall, I’m not sure it’ll be noticeable over the first part of the week at least, and more likely generate a general sideways move, although with some limited breaks of the recent range.