Defensive, Going Into The NFP

For people into S&M it was the perfect day to get whipped yesterday. I’d be much happier if I could see a solid outcome from those moves but all it has done is entrench the conflicts I see in the Europeans, GBP/USD opening a sore wound, USD/CHF retaining the conflicts I highlighted in Monday’s video and USD/JPY soaring into the sunset. Well, at least USD/JPY was in the right direction and in line with the preference I have stated for so long.

Add to that, the charts now abound with straight lines and mini corrections that make life difficult to be totally certain of which wave is which. Short Wave (i)’s with deep Wave (ii)’s followed by long lines makes identifying projections a bit of a lottery from the fact that it’s easy to make many minor inflections in the later structure potential projections. There are also mini Wave (ii)’s and while still tough, the knowledge of having reached a Wave (iii) is often recognised only once a deep correction has been seen. There are a few of those lying around on the battle grounds charts so do treat these as clues when they develop.

Another complication today is obviously the Non Farm Payrolls. Another lottery, except it’s a lot easier to lose more than the price of the tickets in these lotteries.

Are there any clearer currency pairs to work with? Probably USD/JPY and AUD/USD. In USD/JPY we do have those mini Wave (ii)’s so that needs some attention when it comes to the deep Wave (iv)’s but overall this should now be in a bullish phase and thus emphasis should be buying into dips. The Aussie - just as I had thought it was on its way to the higher target went and recycled. Ouch. However, that should still mean that we’ll get the rally to develop again.

Elsewhere, I have to consider the potential for GBP/USD to edge higher and to the original retracement area that I was considering for the past few weeks. However, from there it should be the downside that then develops. In turn, that raises the question whether we’re correcting higher in EUR/USD or forming a new stronger rally. With USD/CHF still retaining that conflict I feel we still need to be exceptionally cautious until this is clarified in a stronger manner.