EUR/USD Takes Sting Out Of Possible EUR/JPY Rally
When it came to the Continental Europeans I considered using the tale of the tortoise and the hare – except neither of these pairs could actually generate any enthusiasm. They were SO slow it was more like the race with a tortoise and a sloth… However, they did at least manage to point themselves in the right direction and this should continue.
Elsewhere, in “Normal Land” we saw GBP/USD sink below the horizon. It was expected but the comparative speed of development versus the Continentals was almost dramatic. I can’t say it has broken down irretrievably but it is approaching a key support that must hold else it will look like a bungee jump without the elasticity.
USD/JPY topped out a little lower than I had hoped although hit my minimum target – but the downside was always going to happen. Thus, with EUR/USD hardly able to get out of bed until almost after mid-morning it took the sting out of any possible rally in EUR/JPY. There is still some uncertainty around the JPY pairs in general. The eventual outcome in USD/JPY is not in doubt but it’s how EUR/USD will impact on the cross that gives me a solid dose of wariness.
This balance should be observed carefully as, once the pace of the market turns higher, we should begin to see more directional moves in general. I am pretty certain of what EUR/USD will do but USD/JPY has several options that can cause some issues.
As far AUD/USD, my doubts about it slipping lower were correct. Instead it has edged still higher. It still has a rather loose range in which it can stall but I am expecting a reversal lower before too long.
It looks like another limited range day – probably including GBP/USD today.