I worked through several of the currency pairs yesterday – particularly EUR/USD and USD/CHF. Both suffered losses against the strong dollar. The EUR/USD support that I felt important broke but with the added stipulation that we had to see multiple time frame bearish momentum. Well, that didn’t happen but it’s still not stable. There is a similar likeness in USD/CHF but this pair has been just about the toughest of all, littered with shallow corrections, lack of correlation and also a lack of deep Wave b / v’s that could compensate – even if I try and work this as a 5-wave move or 3-wave…
From that perspective I remain cautious. My preference is to hold off and wait for confirmation of a resumption to the dollar downside – or a complete breakdown. I was looking at the EUR/USD structure from 1.0710 and saw that it was a very similar clunky structure that led up to the 1.3993 high 2 years ago – from the 1.2744 low - that unusually had two deep corrections in the Wave ii and Wave iv. This can occur in complicated complex corrections.
I have noted that GBP/USD actually seemed to perform well. This is another factor in my preference for dollar losses to develop but as I mentioned, I need confirmation. This is also another factor of not committing to a Dollar bullish outcome at this point and is doubled by the fact that USD/JPY has either seen its first high from 105.54 or a mild risk of a minor new high. Given the sideways development in EUR/JPY it’s clear that we’re not seeing any impulsive development going on – except in the lower degrees. This could provide supporting information when this range breaks.
As an overview, we still have dollar bullish 4-hour Price Equilibrium Clouds and momentum that is beginning to pick up – but not quite confirmed. It would seem that much depends on today’s development…