That was a very trying day. The best outcome was actually EUR/JPY – which is normally a pretty darn hard pair in general given its propensity for choppy development that tends to conceal the identity of the structure. GBP/USD wasn’t exactly wrong but just managed a much deeper (extreme) pullback than expected.
Otherwise EUR/USD, USD/CHF and USD/JPY went on a rampage. In the Continental Europeans I thought I had it wrapped up, but dollar supports all gave way and have allowed further dollar losses – above Friday’s NFP extreme in EUR/USD and below the 0.9840 target I had been looking for… Attempting to reassess the structures was quite some task. I’m not sure that I have the right structure to tame the moves we’ve seen – but we’re approaching some significantly important areas that need to hold otherwise it’ll need a review of the weekly structures – which from the 1.3993 high in EUR/USD would be quite some task… For the moment, it would be best to work with shorter-term outlooks during which I can only hope to judge the outcome.
USD/JPY has also been a challenge. The extended losses reached 114.20 from where we have seen a limited recovery. Just looking at the structure it tends to suggest a deeper pullback – but we haven’t seen the final low yet. This could take a while due to the initial recovery that suggests a ragged move higher but with risks of complex corrections. This could be a bit of a roller coaster…
EUR/JPY saw a low yesterday and is due a pullback. It could be complete, but like GBP/USD, there are a range of retracement areas to which it can reach… It’s not the easiest of moves to judge so combining moves in USD/JPY and EUR/USD will be required.
As for the Aussie – partly what I had expected but not quite. There was an extreme first leg but I feel we should see losses resume.
Lots of risks today – take care.