Although price has consolidated for most of the Asian session, our weakening dollar bias is still in play. High oil and no signs of a Fed bailout sent the Dow down 350 points on risk aversion. We also saw Japan’s CPI rocket to 1.5% signaling higher inflation which means higher interest rates. Therefore we can expect some carry trade unwinding.

On the economic front today we have UK GDP and then US PCE core and University of Michigan survey. The dollar is weakening at a fast pace but we can see how the bucky is finding moderate support at these levels. Heading to the weekend we will certainly look at fundamentals but still honor our Probability Studies

Herewith the Probability Studies for Today:

EUR/USD - No Trade Zone within a Bullish Probability. The bullish 60minute trend is still intact, therefore the bullish probability. The 1 hour indicators are bearish and thus we have a no trade zone and even if these 1 hour indicators cross bullish then price has to violate the bearish Current Trend resistance (Blue line at 1.5773) before we can resume all bullish entries

USD/CHF - No Trade Zone within a Bearish Probability. Price violated the Major Trend support (red line at 1.0265) and the bearish trading condition ensued. Price has since then pulled back a bit to find major resistance at the violated Major trend support which confirms the violation. The previous bearish 60minute trend’s range was a bit large and we identified a new, more active 60minute trend. Nevertheless, the probability remains bearish and as soon as the 1 hour Stochastic cross bearish we will have a suitable bearish trading condition once again

GBP/USD - No Trade Zone within a Bullish Probability. The bullish probability is definitely intact and as long as the 60minute trend remains bullish and the 1 hour indicators cross bullish then the trading condition will come into play again

USD/JPY - No Trade Zone within a Bearish Probability. Price is converging with the bullish Current Trend support line (blue line at 106.50) and we would therefore wait for this low to be taken out before trading short again. Nevertheless, the probability is still bearish with a no trade zone

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