The movement lower in the dollar from the first day of the year has been quite a roller coaster ride with deep Wave b/iii’s being quite prevalent across the wave degrees. Still, it has – in its own way – provided the outcome for which I had been looking for, although even I found this challenging. However, it’s providing exactly what is required. Perhaps the more annoying pairs have been GBP/USD and AUD/USD but they’re coming to the point where they should begin to calm down – the Aussie probably earlier than the pound.
The adjustment I made on Friday did the trick. I was struggling with the balance of the structure when I suddenly had that “aha!’ moment – and indeed the lack of logical structure was the key moment that made me look for the alternative. There’s still a bit more of this to go so there’s still some care to be taken.
Throughout, USD/JPY has been rather immune to the wild swings in the Europeans. I count this as positive but, as mentioned above, there is still some risk of the current listless move to continue. This obviously needs to be linked to EUR/JPY that has seen quite a solid recovery from the 120.53 low. It doesn’t have much room before it needs to make a break in either direction – and this will obviously require EUR/USD to follow the game plan.
I sense today will begin relatively quiet, but could end with a bang.