Wednesday, January 10, 2018

MORE OF THE SAME?

The expectation of a consolidation did develop but was short lived. What was slightly surprising was the deeper pullback in USDJPY that then encouraged the bearish EURUSD (following its short lived consolidation) to push EURJPY way lower. The cross should soon see a pullback higher but not by a large degree – and that tends to suggest the potential for consolidation with both majors seeking the Dollar upside. I’m not sure whether I have the USDCHF structure correctly but this should also see gains resume.

At the same time, GBPUSD should follow the main group in hunting up the Dollar but this pair has lagged quite a bit and I wonder whether it will have a growth spurt. That’s not a forecast but just the musings of why it has not really matched the losses in EURUSD…

What I do see is EURJPY the risk of a more limited move today. It needs an initial upside and then the downside – but then a pullback higher.

As for the Aussie, it has two alternatives: either we shall see an expanded flat or a direct follow-through from yesterday’s decline. Given the comments above, the second alternative appears to be the most likely…

Good trading
Ian Copsey  







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