Apart From The AUD/USD, Expect A Slow And Nervous FX Session
Following Tuesday’s sharp reversal to a bearish dollar yesterday saw a more steady development. On the whole the pairs behaved extremely well with the exception of GBP/USD that ran itself out of the bearish structure. This should now see the market begin to settle down again but will likely still have a hangover following the speed and depth of the dollar reversal. It should allow some further gains in the dollar today but probably limited due to the 4-hour Price Equilibrium Clouds still at a firm angle that could stall any recovery.
If there is any pair that can see a more directional move, then it’s AUD/USD that followed yesterday’s script perfectly but here price has been oscillating around both hourly and 4-hour Price Equilibrium Clouds. This type of event can generate a more directional break and I wouldn’t be surprised to see the Antipodean make a break for glory.
One more neutral pair is EUR/JPY that has been reacting to the relative performance of both EUR/USD and USD/JPY but has also seen the cross develop perfectly according to the structure. It’s rather difficult to know whether we’ll see a firmer move today due to the likely reversal in both EUR/USD and USD/JPY but I suspect the latter will have a slightly more bullish day today. However, initially it could be very cautious.
So, apart from AUD/USD, this looks like a potential slow and nervous session to allow the market to settle itself down…