Yesterday’s outlook was pretty much as expected. Certainly, the start did not see an expanded flat but instead just pushed the dollar higher. USD/JPY reached the 112.05-22 target area as expected and was followed by losses. However, for the other majors we saw decent dollar gains with the exception of GBP/USD that basically continued on a sideways consolidation.
So, pretty much as expected, the next stage is that once the Asian center has managed to do very little, the Europeans should take the helm for dollar gains to follow-through from yesterday’s development. However, I suspect this will provide another push higher and in quite a firm move.
As for the Aussie, it should follow the same dollar gains towards the higher degree Wave iii that should see the target I suggested on Tuesday.
EUR/JPY made decent losses but is due a pullback higher, most likely USD/JPY to initially provide the recovery and later for a reversal once EUR/USD has woken up to generate losses.