I clearly hadn’t caught the structure. The dollar gains seen yesterday were always going to happen but obviously caught me out. USD/JPY was the first to react with the break above 107.39. After that, all the other pairs began to play follow my leader. Thus, the expectation should now be back on the Dollar upside. However, the start appears to be extremely complicated and I tend to feel that we may see some recycling before the dollar rally can continue higher.
In GBP/USD, I am slightly surprised with the losses seen and while the high at 1.4376 failed to extend any further, it tends to complicate matters more. For now, it should be bearish – and has a daily bearish divergence – so this could have seen an alternative structure on the way up… Certainly, there still appears to be room for losses.
USD/CHF saw only a minor pullback and is back on the upside. Indeed, it has generally been the leader of the pack. As long as it stays on the general Dollar downside, I’ll be happy. Even AUD/USD, after it’s deeper pullback, is now looking for losses. With all dollar-currency pairs we have a unified outlook.
As for EUR/JPY, I had indicated the potential for an expanded flat within the recent peaks and that has led to a final high. This does look bearish overall…