I found yesterday somewhat of a strange day. There were some concealed wriggles that have exposed a small weakness in the way I had looked at the development of the prior few days. I had also mentioned the shortfall in EUR/USD and USD/CHF that seemed to limit the next move.
That situation adjusted itself yesterday to provide a much stronger foundation for the next intermediate targets as described in the weekly video. As such, while there is a little more base building to be seen, I suspect we shall, by the second half of the day, begin to seen more progressive Dollar gains. Keep your eyes focused on the areas I suggested for the next intermediate targets.
The Aussie stalled perfectly within the projection area suggested yesterday. Here we have a potential difference in outlook compared to the Europeans. I don’t think it’ll last for long as I do view any upward move as a correction. Thus the approach should be to look at how this correction develops and note the higher-risk areas where a top may be found. Once this has been seen we can begin to look for another leg lower.
The JPY pairs didn’t quite move as expected. It doesn’t alter the basic outlook, rather it provides an alternative route, not too different than the one I had suggested. It may end up with EUR/JPY falling slightly short of the ideal target but this will require USD/JPY to make a firmer attempt to push to new highs. The bigger risk here is timing. USD/JPY does seem to require a slightly deeper correction first. While this may balance out with how I see EUR/USD over the first half of the day, there is a fine line between bullish and bearish in the cross and this needs to be noted.
Indeed, of the two, USD/JPY has a stronger structure, although with a weaker EUR/USD, at some point USD/JPY will need to see some solid gains and preferably the sooner the better…
Overall I feel we can probably allow the Asian session to pass, maybe some of the European too, which will provide us with a stronger understanding of whether the development supports my outlook. Assuming it does, we should be able to take advantage of the resultant moves.