Yesterday was a predominantly pullback day. In the process, I have found some errors on the way, but this provides a good opportunity now to begin the process of completing the correction to then move lower. This tends to suggest an initial rally and a reversal to form the bearish foundation waves.
So far, we have seen USD/JPY complete a double zigzag and without a bullish divergence, we’re likely to see that final zigzag. This also matches with EUR/USD that needs a limited rally with momentum beginning to wane.
Two markets were the difficult part. I had to concede to a deep pullback lower. In this scenario, we now have the (blue) Wave -a- at 0.9952 and a deeper Wave -b-/-iii-. Take care in the early stages but we should head higher over the day. This was pretty much the same in GBP/USD, but it meant that the 1.2440 low was the (brown) Wave -a- and we’re now looking for a minor new high – with divergences – to see a reversal lower.
EUR/JPY edged up yesterday but then whipped back lower. I’d like to see a pullback higher, but I suspect it will not be too deep. Once we have completed the final zigzag in USD/JPY, along with the limited upside in EUR/USD, we should be heading lower in the cross – or may see a consolidation at some point.
AUD/USD managed to form a Wave (a). From there we have seen some gains but in a pullback. Once again, we need to watch for bearish reversal indications to then see losses.