Really? I mean … REALLY?! The market, having been locked in a trauma gapping this way and gapping the other, see the agreement and decide to sell the euro anyway. It was always going to be the conclusion, so why all the dramatics with the wretched, messy consolidation? Or is it going to extend its losses?
Even now, as we’ve seen EUR/USD decline following the announcement, it hasn’t broken the larger range. From that perspective, it’s worth still being more on the conservative side. However, while USD/CHF hasn’t yet breached the 0.9514 high, the rally it has seen does tend to point to the upside. Let me add another “however.” GBP/USD performed perfectly yesterday, and I have the bigger picture as bullish. Obviously, that’s a stark contrast to a falling EUR/USD…
This conflict may not be a problem, but it’ll sure need confirmation. Over the past months, there have been windows within which I had thought we’d see the dollar rally, only to have that outcome dashed at the last moment.
So, if EUR/USD is to go lower, then what about USD/JPY? It broke key daily support. If we see both EUR/USD and USD/JPY decline, then what of EUR/JPY? Obviously, if this development occurs, it will be the best trade to hold.
Add to that, AUD/USD is approaching a temporary low. Having said that, the Antipodean is one currency pair that can go solo.
In summary, I’d really love for EUR/USD to finally descend further but, at this point, it may well be worth watching for confirmation…