Gee, we could have taken the day off yesterday. Dull… but then it’s still August. I am expecting things to hot up a bit more, not particularly immediately but at some point in September. However, today I can’t see a similar day to yesterday. In fact, in some ways, the fact yesterday was flat really made the analysis easy today … because nothing has really changed. Yes, it wasn’t what I had wanted but did know there was the risk of deeper pullbacks – and that was what we saw yesterday.
If there are any doubts in my mind it will be because of the apparent degree of movement required across the pairs. First things first, the key pair that can provide a key barrier is in USDCHF, as I have been mentioning. This still needs some Dollar bullish development and we’re going to have to watch all three Europeans achieve their targets. Once that is done we can see a more constructive development.
This same outlook is relevant in AUDUSD also. It doesn’t have a pretty structure but it is valid. Obviously we need take care of the key break points, but as long as the above is correct we should see the outcome I have been expecting.
As for USDJPY… well, it shot up in early trading yesterday, making me feel we should see the next move … but then it seemed to find itself lost in a maze. There’s no real break of my scenario but it certainly doesn’t have much room before the structure breaks. On top of that, with USDJPY appearing to be working in opposition to the Europeans, it gives me a headache in EURJPY. Frankly, I think we need to sit back and watch these two pairs and wait for it to commit to one direction or another… Once that occurs we should be able to move on from there…
Have a great weekend