Stocks end higher on U.S.-Iran deal hopes, Dow posts first record close since Feb
I found yesterday partly OK-ish and otherwise skewed. I’m also beginning to consider some rather firm reversals – well, more likely deep-ish corrections. Some of the development yesterday did have a certain fishiness about it. So I’m expecting some possibly difficult development today but probably nothing too outland-ish. This process should certainly shake out some of the dollar bullish positions – some rather limited and others less so...err...ish.
Most likely, it’s going to be a steady, but probably messy decline and could include some difficult complex corrections in-between. This suggests a strategy of watching for prior support/resistance areas and for selling into dollar recoveries with the aid of momentum and noting where the hourly and 4-hour price equilibrium clouds may help. This seems relevant to the majors – less GBP/USD, AUD/USD and EUR/JPY.
For GBPUSD, the risk appears to be for a more erratic development. This needs a little more care but in particular EUR/USD can help out its erstwhile buddies in Euro-land.
EURJ/PY – well, quite clearly with the underlying pairs pointing in the same dollar direction the risk will be for a retracement lower but probably less aggressive.
That just leaves the Antipodean that took a slightly different route (although in the right direction) than I expected to reach the lower target area but doesn’t appear to have found the final low. This did come as a surprise but may well just be a slightly firmer decline but with the same basic outcome.
There’s a high risk of a messy day. Take care.