Last week required a lot of patience with the sideway swings never really managing a strong follow-through, although just enough to maintain the dollar downside. This past week has provided some challenging developments, minor breaches that really I could have done without. Even this morning has seen some moves that I hadn’t expected.
I am expecting a stronger directional move to develop before long, although the moves we’ve seen since open actually make the structure more complicated. This is going to require some attention to spot where the break levels that will trigger a stronger projection, whether this be bullish or bearish.
Note that the Continentals have a kinda alternative outlook compared to GBP/USD, although initially they may look to be the same. Going forward I wonder whether this will end up with a really complicated outcome. However, for now I tend to prefer the dollar downside to continue but with some reservations.
The Aussie needs to see deeper losses now. The potential expanded flat failed to materialise and therefore we have seen a 3-wave pullback. Thus, there appears to be only one direction and that’s lower.