It may not have been a particularly exciting day, but the market has done enough to start with. I’m not really expecting startling moves today either, and in the Europeans it could actually look as if not a lot is going on. However, we have to remain patient while a foundation can be built to then take the next step forward. Indeed, it’s quite possible that we’ll get a very similar reaction to yesterday. Whether we begin to see a more directional move by tomorrow is uncertain, but whether it finally sees a firmer follow-through tomorrow or Monday, there’s not a lot of difference. We just have to build our bases.
Out of the three Europeans, it was GBP/USD that took a day off and meandered on a general sideways path as if it was waiting for signs of daffodils on a rain soaked afternoon. I have a tentative feeling that it is not going to have the same impetus that their Continental counterparts will eventual develop – but for now we just need to allow it to progress.
The Aussie produced a solid bullish day. I think this can push higher again, but momentum should begin to slow to produce a rather ratcheting move higher. There’s probably not a particularly easy way of extracting pips from this pair, and it's best left aside to observe momentum and key support and resistance levels.
Out of the JPY pairs, EUR/JPY performed like a star and stalled right in the target zone. The subsequent bullish recovery was quite robust. However, it has seen an extreme, and we should see this reverse back lower today, probably driven by EUR/USD mostly, but I wouldn’t be surprised if USD/JPY may offer assistance at some point. The mother JPY pair is still suffering with dizziness, moving erratically and indicating that it will most likely dither around for a while longer. However, at some point I am expecting another attempt lower.
Best vehicles today are probably EUR/USD and USD/CHF, but don’t expect a strong directional move…