All major pairs in consolidation mode: AUD/USD longs in play
Consolidation usually means continuation, which would be good news for the USD bulls. Ever the contrarian, I’m building an AUD/USD long position just in case the bottoming formation eventuates but I have a very tight strategy stop below .7700.
EUR/USD: Consolidating its powerful downmove between 1.12/1.15 and we’d really need to see a strong weekly close above the latter to endanger the bear trend. That said, there has been a lot of bearish news in the last week and the market has not been able to print fresh lows, perhaps a sign of some exhausted bears?
USD/JPY: This has been the classic range trade 116/119 for the last few weeks with some false breakouts in either direction unable to generate any momentum. Toss of a coin as to which way it breaks, but I guess the trend is your friend until proven wrong.
GBP/USD: 1.50/1.53 are the numbers to watch here and if EUR/USD breaks higher I expect the cable to out-perform.
AUD/USD: Like I mentioned, I see good risk-reward in the contrarian play at current levels especially as pairs like EUR/AUD would seem to have plenty of downside potential. .7725/.7860 are the levels I’m watching and I will build more aggressively if we get a daily close above .7875.