Dollar Losses To Continue

As I write, in pre-Asian open, I can see EUR/USD poking its head above the Price Equilibrium parapet and USD/CHF below its below the Price Equilibrium floorboards. Given the events over the weekend that’s quite a show of bravado from the market but one that, in the Harmonic Elliott Wave world, does seem to be correct. Still, I don’t think we’re going to see too much movement in the Asian session but certainly later there should be a stronger risk. I’ve pointed out these pairs as they seem to stand out. GBP/USD doesn’t seem more to lack faith in the upside compared to EUR/USD but actually that seems to be right also. However, I don’t see significant losses from here and more of a reversal higher. Even so, I can’t see the market being aggressive in pushing the Dollar lower since while the three are basically in correlation in fact they are in completely different structures right now.

The Aussie is a bit of a conundrum right now. I certainly called it higher on Friday but it has exceeded my expectations. It’s courting a fine line between bullish and bearish, a very, very fine line and I’d be quite confused with further gains. At this point I think it better to wait for confirmation but it wouldn’t take too much of a hiccup to see this extend gains.

As for the JPY pairs: It looks to me as if USD/JPY, having baulked at making the optional blip higher, is taking the same road as the Europeans. It needs to display a little more energy in the downside but still has an option to make a new high. Overall, we should see this join in with the Europeans but need to take care in early trading to confirm its intent. This probably warns us to remain cautious in EURJPY. It still has too many options and if the past 10 days is anything to go by we’ll not see it make any significant break from current price. Therefore, unless some other catalyst develops I’d stay clear of this one for a while.

Basic outlook is for the Dollar to end lower overall… but take care with the Aussie.