Following that curious “almost” consolidation, the outcome I had been expecting didn’t occur. That is, it was looking like a consolidation but the outcome has suggested a more direct outlook. Having said that, the follow-through in late North American and early Asian trading appears to suggest that the rest of the Asian session – perhaps in to European – will see a correction/consolidation. The overall higher degree and lower structures (that I have in my spreadsheet) are beginning to suggest the different levels of projection targets that are required as we move forward.
Of course, it was GBP/USD that led the way… (Rule Britannia!) It was always going to happen following Brexit so I don’t think there are too many folk who are surprised by these losses. The biggest problem I have with this particular pair is the rather scanty development that is really hard to tie down. I do have what I feel are key turning points (these can be adjacent) so it’s a matter of managing the lower degree waves.
Overall, this should lead the dollar higher – of course following a correction – with the exception of USD/JPY. I spent a long (long, long) time trying to work through the structure from the 98.89 low upwards but from any angle I approached it I came up against brick walls. It’s going to be a matter of working through the decline we have seen to work out whether it’s an impulsive move or corrective. I think we may be close to this decision but I won’t know until it’s done. This is a matter of alternation. Will it be present – or not…? This has driven down EUR/JPY and risks further losses – but of course the balance between USD/JPY and EUR/JPY is going to be critical.
The Aussie… followed along on the downside and like many pairs we’re likely to see a correction higher before losses resume.