All was looking good by the time I sent out the reports yesterday. By the end of the day it had become a quagmire of alternatives. I had developed a logical outcome across the three Europeans based on their respective – and different – structures that could develop in correlation. This has become somewhat harder now.
I have (and did have) an alternative for EUR/USD but the correlation with the other two appears irrevocably damaged. Well, maybe GBP/USD could handle the change in EUR/USD. As for USD/CHF, it does raise question marks that mean we have to take tentative steps until either a new alternate structure develops, or just plain blows up.
At least, for today, I suspect they will have localised correlation for a while.
This even hit AUD/USD, breaking above 0.7674 to extend the upside. There may be a risk of a completely negative, sideways move in this pair. At least, it has the option. I have resolved the structure and this should just be an overlapping bullish structure, but in its latter stages. So much depends on momentum – whether there will be any directional movement or just a sideways move – perhaps a complex correction.
As for USD/JPY, it continues to stubbornly remain attached to an invisible rope tied around its neck but from below. It really is bugging me at the moment. There’s no real hourly bullish divergence but there is a long, elongated 4-hour bullish divergence but then, the recent moves are hardly in a strong trend.
The descending channel drops by around 15 points a day and we have a potential double bottom now. However, I’d much rather this is confirmed in reality before any action is taken…
It was EUR/USD that dragged down EUR/JPY and it now has to make up its mind. Will EUR/USD carry it higher or the double bottom in USD/JPY… or will it fade and drop listlessly below 112.07…?