Yesterday’s dollar bullish corrections were just the order of the day. The only difference is that instead of a complex correction we have seen a triple three in its place. From this point onwards, while the outcome is basically known, there can be several routes to choose with potential for complex corrections piding the legs that are required.
We also have to consider tomorrow’s Nonfarm Payrolls. As a general template, the market tends to become a little reticent to push the extremes before the announcement. Today should be steady, but there’s a much stronger risk of a correction between the legs. It would not surprise for that correction to be complex.
So we should see a steady day again today, basically directional, but once the first leg is complete, do begin to think of the potential for the complex correction.
The two Continentals are pretty much set on the tight track. GBP/USD remains in a similar situation but has potential for more complications and a greater number of swings. I can’t see it making a direct move to target – so be aware of the legs that are required.
As for the Aussie… oh gee, it certainly likes to take the most circuitous route to complete a move… This could be more complicated than GBP/USD. It also has a projection target that is SO close to 0.7834 that I have some doubts. It may well be best to let it make its move and wait for the last legs. If in doubt, just stay out.
Finally the JPY pairs: I was pretty much expecting losses in EUR/JPY because of the downside in EUR/USD. That USD/JPY remained buoyant for so long provided a drag on the cross, but I suspect that USD/JPY and EUR/JPY may well switch roles. I would also not be surprised if the final outcome is dictated by the NFP tomorrow.
Seems like a steady day in the Europeans… the Aussie… let it flow, and a choppy day in the JPY pairs…