The first two days of the week haven’t been startling but they have provided one or two surprises amid the general build up to a larger move. We’re getting very much closer to a more directional impulsive development. Both GBP/USD and USD/CHF have made their first forays but EUR/USD is a little more complicated. Recently I have been duped by stubby, mini-minor Wave v’s – in fact that happened yesterday in USD/CHF. The puzzle we have now is whether EUR/USD has also seen this type of development or whether it has turned lower. Today will be a litmus test for how the Europeans will proceed…
That AUDU/SD does not appear to have found its final high may be a sign of dollar weakness today although I see this potentially being a rather whippy development. Certainly it didn’t reach a “normal” corrective level on the downside so either it must move back to below yesterday’s low or see a deep correction before making a new high. Whichever way, it promises whipsaws…
If EUR/USD is to copy the Antipodean, then we’re in for a choppy day…
The biggest disappointment was the caving in of USD/JPY. This has brought it back into the larger range but hasn’t really clarified what it wants to do. There’s a risk of a triangle although it’s a long pointy one. The problem with this type of development is that it can morph very quickly into an alternative corrective pattern. Quite frankly it’s best to leave well alone while it makes up its mind. Until then, the risk of minor breaches and reversals that could trigger a stop loss and then reverse is very high.
That USD/JPY broke lower aided the downside in EUR/JPY. It should now be due a correction – or indeed is in a correction – but it’s the depth of the correction that’s unknown. The most likely trigger for a stronger directional move is more likely to come from EUR/USD…