Well that was not what I had expected… Actually, a couple of weeks back I did suggest the low 1.06’s as the base for a recovery but then thought it could actually move a bit deeper. It’s a shame that I didn’t stick with that. What this has generated is some short-term uncertainty that could last through to the end of the day – perhaps into Monday. Overall, it has generated some complications although within the larger daily structure everything appears to be on track.
This should still see some guarded development through the Asian session and probably Europe also – and mentioned above, possibly through Monday. Very much depends on whether the market has any enthusiasm as we go into the weekend. However, do keep in mind the dollar upside and the potential for further gains if key resistance levels are taken out.
In AUD/USD, strength seen has reached an interesting area also and when considered within the larger picture the alternative count I have been suggesting does look quite interesting. I do find that the Aussie can lead the way – and perhaps this pair can provide a stronger broadcast of the next move.
That USD/JPY also dropped much deeper than expected was a bit of a bummer. However, having gone through the spreadsheet I can see sense in what has happened. This has a little duality as the day begins but probably it’ll be EUR/JPY that may be able to help us out. The Cross edged to a new corrective high – just a mere 6 points above 132.20. This could also provide some key information also.
Thus, while there is risk of a stagnant market today, do keep your eyes on AUD/USD and EUR/JPY to work out when a stronger move is likely to develop.