My goodness, what a dour day it was yesterday. This grudging, slow and almost frightened market just failed to have any definite impact. It was good to see USDJPY make a new low. That brought the 4 majors – less GBPUSD – into a degree of correlation. The odd one out – GBPUSD – almost succumbed to the downside but then suddenly launched into yet another zigzag and by gum, an amazingly complicated and intricate one - although it’s not quite complete but we’re going to have to take care with this pair.
The Aussie extended losses and towards the general target zone I mentioned – between 0.7640 and 0.7560. We’ve edged into this zone but I feel it needs a pullback and a final leg lower – all within this range – before it rallies. This does seem contrary to the majors but we are beginning to see an hourly bullish divergence but perhaps we need the second decline to allow 4-hour momentum to join in with the bullish divergence.
As for EURJPY, it actually saw a pattern very similar to USDJPY – and that implies gains. However, I think the pullback higher will be limited.
It doesn’t look like a frantic day today – but should set us up for a stronger trend next week.
Have a great weekend