For the most part, the steady trading I had expected developed. There were a few strays but overall the main outlooks were standard for normal development. This appears to have completed the dollar downside outlook, barring AUD/USD perhaps, and therefore I suspect we’ll see the dollar begin to return to the upside. While saying that we should see a bullish dollar, there is one risk that should be considered – that in EUR/USD and USD/CHF in particular. Yesterday’s pullback developed in 3 waves, and this could provide a sideways consolidation in a complex correction.
I feel by next week the chance of a more directional trending move is becoming stronger. This is also true of the indices. Before that trend develops there is risk of foundation waves being built – and/or a corrective structure that can lead us into the decent trade set up.
Of all, perhaps, USD/JPY dipped to just 6 points above the 110.97 low. It isn’t quite out of the woods, but with momentum supporting, also EUR/JPY, there should be a decent recovery. We’ll have to be patient in the first half of the day while price finds both pairs knocking at the 4-hour Price Equilibrium Clouds. By the end of the day there is a good chance of breach.
The Aussie performed well, holding at the support area I suggested and from this point I suggest caution. There is a fine line between bullish and bearish still and we’re going to need a level of due diligence in observing the structure and whether it points strongly higher… or not… The key pivotal area I pointed out yesterday remains the key to the next move…
A slow start – but by the second half of the day we should see some better movement…