Should We Be Expecting Great Swings In The Future?

I’m finding this deathly, dull and slow development quite frustrating. It’s like being a kid waiting for Christmas. But, the days and hours and minutes all seem to get longer exponentially, so that it feels like the day will never come. Dare I say that it’s getting closer – could be reached very soon, but there’s always the chance you could be dreaming and wake up having seen yet another correction and thus have to wait for a while longer.

I do think we’re going to see some greater swings, perhaps not directly, but the evidence appears to be building for the dollar to reverse back lower, particularly in the Continental Europeans and the USD/JPY. Apart from Harmonic Elliott Wave there are other supporting indications with Dollar bearish divergences in the 4-hour chart, potentially in the daily charts. It has been hourly momentum that has been the thorn in the side, providing false promises of dollar bearish divergences, then turning on a Euro/Franc and gloating with a “nyah, nyah – tricked you!” I don’t think this is going to happen immediately but with the 4-hour Price Equilibrium Clouds beginning to flatten out just above/below price (EUR/CHF respectively) the potential is there.

The Aussie reached its downside target but I’m not totally convinced that we’re seen the low. It could be a tricky day and even if we get a correction higher this pair has the ability to see either very shallow or very deep corrections in this position. At this stage of the structure it will be better to reduce position size, even square out and wait for the next move.

The JPY pairs behaved appropriately, the USD/JPY is now pushing the upside limits and has the potential to make this a long, drawn out affair that could look like a consolidation but with an upward bias. I don’t think we should be looking for massive gains and more to looking for reasons why it could reverse lower. From this, and the comments on EURUSD, the outcome for EUR/JPY seems doomed to stay in a tight range. What will decide the next direction will be the comparative reactions in EUR/USD and USD/JPY as they reach their targets.