One corroboration does not a theory prove but you also cannot birdie them all if you don’t birdie the first! Well now that the cliches are out of the way, let’s go back to our myth of the week, that the first move of the week in Asia is always wrong. Last Monday we saw EUR/JPY and AUD/JPY get sold off quite aggressively during the entire Asian session. EUR/JPY posted a low for the week at 113.10 last Monday and closed the week at 119.00, AUD/JPY posted its’ low at 55.55 and then proceeded to gain over 10%, finishing the week above 62.00.
I know this is not conclusive but it is a strong endorsement of the theory.
A corrollary to the theory is that if the Asian move posts a medium term high or low, then the consequent rejection will be all the stronger and that seems to have been borne out in this case.
