The Dollar must surely break out of its range today…

Even with the U.S. Non Farm Payrolls number the Dollar still failed to break the tight ranges seen against the Euro and Swiss Franc while volatility continued against the British Pound. How long can this status quo remain? How long can the rabbit stand in the road and not get hit…?

I’m pretty confident that today will see an extension one way or the other. When I first looked at the charts before today’s open I began to shift away from the Dollar bearish side to the bullish. However, the initial losses seen in the Dollar, while not actually making that final break it brings back the potential for continued range trading for at least the first part of the day.

Overall, it looks like a break of the 1.4808-1.4916 EURUSD and 1.0125-1.0202 ranges will most likely seal the direction and with GBPUSD pressing towards the 1.6692 high my underlying Dollar bearish preference may well come to fruition. Let’s see just how they go, but in the larger picture this still should not extend much beyond the recent lows at 1.0032 USDCHF and 1.5061 EURUSD…

The drop in USDJPY was pretty firm and I had indicated on Friday that this may well mean the end of the end. Having looked again I fear that I may have failed to recognize one alternative. The low at 89.61 was almost an exact wave equality target of the prior decline from 91.26 and that means we should also consider the possibility that all we’ve seen is a deeper correction. However, if Friday’s low breaks followed by the 89.18 low it won’t look at all healthy…

Given the bounce in the JPY crosses it looks as if we shall see USDJPY rally and potentially along with EURUSD since any break above last week’s highs is going to look pretty bullish – and more than I had considered before. It really looks as if we’re going to have to watch the entire combination of straight Dollar-currency pairs along with these crosses.

Today’s free analysis is for AUDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups (+30 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users