The past couple of days have been scrappy. The lower degree development has had its fair share of complications. The higher degree structure is broadly intact but is a breath away from being scuppered. I’ve had to go over recent movements to try and seek clarification, although in particular the dollar index doesn’t seem to have much room on the downside before it suffers a deeper collapse. That, at least, tends to confirm the comment above about the higher degree being as risk of being scuppered…
The break of the support in EUR/USD I detailed yesterday act as a double-edged sword and the next larger break of either this week’s high or this week’s low appears to be critical. Even then, whichever way, there could still be risk of short-term erratic behaviour so there are risks on both sides of the market.
If I have any preference, it remains on the dollar bullish side. USD/JPY has been a rabid, difficult decline to follow. Recently it has hit potential projection targets within 1-2 points and raising my hopes we’ll see what should be a deep correction, but each time being dashed. I am resigned to waiting for that deep correction to confirm the structure – but today still has that potential. If that develops, it will require EUR/USD to move lower and provide help for EUR/JPY that has been developing quite well. I note that the monthly Price Equilibrium Cloud high was reached yesterday – and actually, once again, suggests a make or break on both sides of the market…
In addition, following the weirdness in GBP/USD and AUD/USD, these two fellas do seem to need losses to resume. Also, while limited, USD/CHF needs to extend the gains that developed yesterday. I actually don’t expect too much movement today with potential on both sides of the market. Rather than try and look for a home run, I feel today may well retain a cautious outlook…