The past 2-3 days of knobbly, erratic and whippy development has been freakishly painful in terms of working out how everything fits together with each other. I began this morning with the count I had been following, hoping that I’d find a solution. I did find the solution – I think at least – but it’s one that I hadn’t expected. The trigger for all of this came from momentum. I don’t like fighting both hourly and 4-hour divergences and these are present in both EUR/USD and USD/CHF. To cap this, the 4-hour Price Equilibrium Clouds are at a vulnerable stage where they’ve been supporting the dollar but beginning to flatten out… No more needs be said…
While GBP/USD is in a completely different position and structure, it is more on the bullish side but without the clarity of the Continentals. It seems the negotiations with the jolly EU chaps is causing reluctance in the market to push the boat out. It’ll probably remain somewhat subdued for the day.
The disappointment yesterday was in USD/JPY that I had expected to follow-through higher – either in a consolidation or renewed rally. Instead it dribbled and wobbled lower over the day. The trouble with such insipid dribbles is that momentum begins to lose focus, although price has drifted below both hourly and 4-hour Price Equilibrium Clouds. This leaves it in no-man’s land and we need a stronger structure to develop to bring us back on track.
These losses in USD/JPY impacted on EUR/JPY but I’m not convinced that we’ll see extended losses. Momentum is still bearish but watch out for any change in the readings…
As for the Aussie, we saw a new high early on in the day but then a drift lower. The structure in the rally to the high was ambiguous and therefore this needs a stronger break of key support / resistance… This will trigger a stronger directional move.