I remember writing some while back that the market seems to enjoy not making decisions. It’s not that the market has a collective mind but more perhaps that the willingness to retain risk is reduced by an undue level of uncertainty. The 1.48-1.50 range in EURUSD has become somewhat of a battleground for diffident bulls and bears…

All the time the pendulum swings from one side to the other. However, each swing marks one more segment of time and I do feel that we are close to a more decisive break. Of course, the million Dollar question is “which way?” Well, currently there has been no break in the weekly downtrend and frankly the break in trend as measured by key swing levels is hard to identify. The daily downtrend is clearer with the 1.4626 EURUSD and 1.0337 USDCHF Dollar highs providing those breaks.

I also think the JPY crosses should soon start falling again but whether this will be driven by a weak USDJPY or a strong Dollar-Europe is the key question. For those of you who have seen the weekend wrap on http://www.fx-forecaster.com/files/Daily_Support_Resistance_20th_November_2009.pdf you will see that I feel that while the weekly Equilibrium Clouds are quickly catching up with price action and daily is oscillating around its own Cloud it still does not rule out a marginal new low.

So the uncertainty is still quite strong. From my own method of projections we have come close to, but not quite reached minimum targets at 1.5146 EURUSD and 0.9932-63 USDCHF. If my measurements are correct then even if the Dollar does dip there is very little downside left. With end year coming and the probable need to pare positions and book profits could also be a determining factor but quite when that will begin is not 100% clear.

So… we have the two sides of the coin… Flip it and see what we get…

However, so far the retracements we saw yesterday stalled around the right areas to be part of a large complex correction. I think key areas to watch fro are probably around 1.4900-25 EURUSD and 1.0138 USDCHF… Much beyond and the pendulum will be swing back to Dollar bullish… However, I’m not convinced it will swing back any more after this…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (+45 pips) and the new review of the support & resistance levels issued in the daily report.