Oh, that was a bad day… It seems I had the pulse of the market just one swing off. I have a feeling that we’re not going to see any strong moves today and more likely a follow-through and reversal. I see this in EUR/USD, GBP/USD and USD/CHF – perhaps even EUR/JPY and AUD/USD. That just leaves USD/JPY as the odd one out I think.
I’ve been harking on about USD/CHF and the impact that I feel it will imply. The mistake I made in this pair was, instead of a deeper pullback, we saw a stronger follow-through and then a deeper than normal Wave iv. Such was the balance within the structure. From here USD/CHF needs a 3-wave move. Both EUR/USD and GBP/USD need a 5-wave decline.
Once the follow-through has been seen, we should see the first reversal targets. It could be just a limited pullback but sometimes they are pretty aggressive. However, at this point we cannot judge.
EUR/JPY should require one more drop – probably driven by a combination of EUR/USD and USD/JPY before a reversal.
…And what about the Aussie? We’re seeing an hourly bullish divergence but no 4-hour divergence. It’s always a coin toss, but given the general expectation I’ve described above for most of the majors, there could still be a new corrective low – but holding above 0.7807.