The Bowels Are Rumbling For The Dollar

I have to say yesterday was a surprise. I’ve been dollar bullish for so long but had not expected the strength that developed. So much so, that I’m just a little wary. My first thought was that perhaps we were seeing a recycling, but for several reasons yesterday’s move doesn’t appear to be appropriate for a recycling. We had so many irregular triangles across a variety of markets that I look nervously over my shoulder all the time. These are probably – no definitely – the most hazardous formations that can look like a normal triangle but then morph into some hideous, profit sucking monster that hits the bottom line.Will the dollar gains follow-through? I think so. Will these gains extend further today? Maybe, but not by too much … most likely. Currently, I’m seeing some minor pullback and follow-through but then some consolidation. Once that consolidation is done with, we should see another firmer move.If there’s any higher chance trend – or at least a directional move – then it’s GBP/USD which made a good job of extending losses but I still feel that we need to see a new high. However, I feel this could take a day or three to develop.The Aussie is at risk of seeing one of those irregular triangles I mentioned above… It’s not really in a position to make a stronger directional move – although it’ll happen at some point.Even USD/JPY has been strong but could find the 124.43 high difficult to overcome today. That level and also 124.61 are key to the upside… And it needs to make gains to help out EUR/JPY which drifted lower to approach the 137.97 low. This is another puzzle because I still feel the cross needs to reach a new high. This tends to suggest that EUR/USD is unlikely to see stronger losses at this point.So, all a bit mixed and means that there are still potential problems to overcome before any larger direction trend will develop.

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