At long last we have broken out of the consolidation and confirmed the Dollar gains for which I had been (im)patiently waiting… These should be relatively direct although a later correction will be somewhat deeper. This seems to be working through the three Europeans in general. I am particularly comfortable with EUR/USD, relatively comfortable with GBP/USD because there are two potential targets and basically satisfied with USD/CHF – in this rally. Where I do have a problem is matching the structures because USD/CHF seems to have an alternative structure – perhaps one more leg than the other two. That I shall solve following the Dollar rally we are seeing now.
The Aussie … it seems to have quaffed too much Fosters lager… The trail it has left over the past few days is more like a walkabout in the Outback. I had thought I’d solved the impasse between bullish & bearish but the early correction lower I suggested didn’t reach target but extended gains once more, but still taking an inebriated path. Therefore, it’s back to bunkering down until the situation becomes clearer.
The JPY pairs also developed well. The gains in USD/JPY worked almost perfectly, but still in the right structure without dragging EUR/JPY higher (by very much.) This was the perfect outcome but I feel the downside in the cross will, before too long, accelerate. The implication for USD/JPY is also implied from that conclusion…
It looks like today will be mostly similar to yesterday but with the exception of USD/JPY…