I had been battling with a weird and un-wonderful structure in EUR/USD, a product of Friday’s NFP that caused such aggressive moves that it hid the lower degree waves in the tick charts – and that’s not easy to work with due to the noise in that time frame.
However, that EUR/USD rallied is a good thing and brings a general correlation across the pairs. Having said that, it also forced a re-think in GBP/USD but one that was pretty tough to adjust. As long as the Europeans and Aussie all basically do the same, we should be able to follow a general pattern.
As usual, as the Asian day begins, we can expect a general malaise. These guys tend to be more position oriented but can also pick out a trade for a few pips. It’s certainly rare for Asia to trigger a stronger move unless Japan announces some information that will tend to move USD/JPY – but even that is rare.
So come to the European session there’s going to be some potential range trading and later on another more directional push. I can see this process extending into next week at the very least.
That both JPY pairs declined is useful. I had been wondering how these two would develop in particular. This could keep USD/JPY in a consolidation over the rest of this week while EUR/JPY is more likely to benefit from EUR/USD.
The Aussie – still doing it’s thing – and should continue doing it.
This should be a two way day but appears to be steady…