That was a wild and whacky ride… particularly in the EUR/USD. As far as ratios go it pushed the limits as much as I have ever seen in various positions but the end result has been very much in line with expectations so I remain hopeful for a precise hit on the target I set on the 21st November. However, before getting too focused on that, yesterday also provided an interesting development in USD/CHF and a less positive outcome in GBP/USD.
While I say “less positive” it is only in the lower fractals and actually this fits in well with my expected outcome in EUR/USD and USD/CHF. I had been suggesting that USD/CHF should outpace EUR/USD in the Dollar losses and so it has done. In terms of structure EUR/USD and USD/CHF are not at all similar. They are broadly correlated but there is a need for a different structural development. Yesterday’s bounce from 0.8983 and reversal back lower from 0.9049 did just that. Thus, I remain quite pleased with the way things are developing right now. Even the fact that GBPUSD is now in a correction lower already is quite in line with both structure and ratios.
It is also interesting to note that AUD/USD appears to have found its low for now. It should just be a correction higher, the problem being that it’s in a position where the depth is one of those unknowns. However, I do feel it has more upside to go but do be aware of the risk of a choppy development.
USD/JPY developed well although in quite a roundabout structure. It’s doing what it should do and I see no reason to change the outlook. It did, for a period, create some messy corrections and consolidation but that’s the nature of a correction within a correction. Still, it should extend losses today but don’t get too bearish as a deeper retracement higher is not that far away.
How this impacts EURJPY is a little difficult to identify precisely in terms of the relationships between EUR/USD and USD/JPY but the main direction for the cross is still lower for now but does have a clear support zone. I suspect this will arrive as EUR/USD corrects lower – the balance with USD/JPY being the only snag.
Probably though, as we move into corrective structures today could be really quite dull…