Pound Makes Solid Gains, EUR/USD Edges Up

That was a bit of a snafu day for the most part. Some good calls, some in the right direction but a little off on projection targets, a reversion in EUR/JPY to the support I had expected last week and a much larger drop in USD/JPY – but within the boundaries of the broad expectations.The most difficult part is determining how all these fit together. The conflict between the Continental Europeans and GBP/USD continues, with the pound making solid gains – more than expected, but constructive at least. USD/CHF made a low in the right area and has reversed, although it has yet to take advantage of the hourly bullish pergence, while EUR/USD edged above 1.1379, but now sports an hourly and 4-hour bearish pergence. This leaves the Europeans needing to generate a stronger break of dollar resistance levels to be more assured of gains. Until then, there is a particular neutrality about the situation.The Aussie has managed to push higher and needs to make a more defined statement of intent. It remains below the larger double bottom peaks, but has done so in a manner that could still support a more impulsive structure. This tends to place it in the same position as the Continental Europeans in terms of needing to make a statement of intent.What I do note is a really solid hourly bullish pergence in the dollar index. Having said that, it does need confirmation of a resumption of the upside…There was always a wide range to the depth of the losses in USD/JPY, and it chose to collapse towards the lower end of the range. However, momentum isn’t really obliging – but on the other hand, EUR/JPY, after apparently spurning the deeper correction I had been looking for as it dipped to 139.03, saw the correction deepen with the fall in USD/JPY, and go to a more satisfactory retracement. There’s a good hourly bullish pergence but which of EUR/USD and USD/JPY will drag this higher? Ideally, with the right support, it should be USD/JPY that fuels the rally…Take care. There are some more potential snafu’s but take note of breaks that confirm the next direction.

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