I have been preoccupied with EUR/USD over the past few days. That we had seen the deep losses from the highs was perfect but there was something amiss. USD/CHF and USD/JPY have been defining bases for the upside and GBP/USD appeared to be wavering within a range. The conflict between a minor new high in EUR/USD and the dollar gains in the other pairs appeared to suggest a conflict.
Then I measured the losses from 1.1263 and – hey ho – it was a 5-wave move. Then a little bulb went off in my mind. I had mentioned the triple three from the 1.0340 low but then I recalled that I changed the first 5-wave rally that reached 1.0828. I should not have done. By putting that back to its right position the rally has been reduced to a double zigzag – AND – the final rally from 1.0839 then developed in an impulsive move with alternation intact.
Therefore, we have seen the final high. I’d still suggest leaving stops above the 1.1294 extreme in (cyan) Wave (b) but frankly, with all the other pairs now looking dollar bullish I think I’ve found my solution.
Within the lower degrees in the other three pairs, there is little room on the dollar downside and therefore the focus today should be on identifying when the dollar resumes its rise. Once this has been seen it should cement the rise of the dollar again. Indeed, I can see this being quite a solid and relatively direct rally towards the targets I have been quoting.
Thus, keep your eyes peeled for the dollar upside.