Really, why take the direct route when the scenic route including the dead ends, detours and red traffic lights provide such a multitude of fascinating insights into the meaning of life? It builds character and encourages study of the Zen of remaining calm.
In terms of the Europeans there remains the issue of whether to drive on the left or the right. The market seems to be happy to drive on either side but not down the centre line. Having said that, they are broadly developing as I suggested on Monday, at least in EUR/USD and USD/CHF. The development is complex and I can’t see this changing over today but still pointing to the target areas I have been suggesting. GBP/USD is somewhat more complicated, promising to drive on the right and sometimes on the left but keeps getting interrupted by blown tires and deviations. It seems to promise more of the same for now but the final outcome should be similar to EUR/USD.
These three pairs should be treated with caution although out of the three I suspect USD/CHF has the clearer outlook. Otherwise look for the targets to be achieved and look for trading opportunities there.
The Aussie is skidding along on its roof, wheels spinning and arriving at a crossroads. Momentum does look rather bearish so if there is any hope of a resumption of the move higher it will need confirmation. Otherwise there’s a pretty clear alternative that could provide a decent trading opportunity.
The JPY pairs…Well, it seems as if EUR/JPY needs a break below Monday’s 142.50 pre-Asian low. Now which of the EUR/USD or USD/JPY drivers will take the initiative is unclear. It’s a bit like using the CarNavi when it tells you to turn left at the next major crossroads but you know a better shortcut. I suspect USD/JPY may well win that argument but it does need to navigate a tricky roundabout so that’s an issue to watch for.
Basically, across the board there are still snafus and complications so note the expected extremes and focus more on those. However, the process of getting there seems to point to a potentially frustrating day again.
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