The depth of the pullback in 3 of the 4 majors (GBP/USD was pretty limited) was not on my expectation list. Part of the issue was that it must have been a 5-wave decline and a deep pullback in the Wave b/iii. That allowed USD/JPY and USD/CHF to drop like a stone. We should have seen the lows – perhaps a mild dip perhaps – but overall there’s very limited room – particularly in EUR/USD that approached the limit by just 6 points. So guess what… We should see the Dollar reverse back to the upside.
In GBP/USD, I was looking for deeper losses – but that didn’t happen. However, adjusting the initial decline it did form a 5-wave move – so we’ve seen the Wave [a]/[v] and most likely the Wave [b]/[v] also. Therefore, we should be heading down to below 1.2477 to a minimum of 1.2459 thru to 1.2382.
The forecast for the Wave [c]/[iii] in EUR/JPY remains valid. We just have to see a stronger reversal lower in EUR/USD.
As for the Aussie… was there a bank holiday down under? The range was just 20 points over the past two days. Nope, I just checked. No holiday. Perhaps they are watching the cricket. It’s about time it broke lower…