More To Go…

That was a decent day yesterday. While it began cautiously, as the day progressed the dollar upside accelerated somewhat, reaching intermediate targets and quickly satisfied the corrections mini-corrections I outlined. Today should see follow-through although we’re now approaching an area where the pace should begin to slow with slightly deeper pullbacks.

Out of the Europeans, while EUR/USD and USD/CHF are well on their way to the targets I have set, GBP/USD reacted with typical British reserve. This lack of acceleration is more indicative of the alternative I described yesterday, although perhaps the word should have had an additional “s”. This appears to suggest a complex correction but that implies several options. However, all three should find their targets around the same time and therefore the Continentals should guide us to know where GBP/USD will stall.

The Aussie also extended losses as expected but should also be due a correction before long. Perhaps there could be risk of consolidation later but for now the outlook remains on the downside – although while hourly momentum is pointing lower there is a potential bullish divergence developing in the 4-hour chart. I suggest watching out for both to confirm divergences…

USD/JPY rallied well. I’m pretty satisfied with this except for the latter stages of yesterday’s gains which I found quite difficult to judge the structure. There is a range of targets – and that’s the problem now the structure has become vague. It tends to make it harder to be totally certain of which projection target will hold. At this point, hourly momentum is positive, 4-hour momentum is slowing but not yet displaying any reversal signals. Thus, we should still see gains but I sense these will get a little more choppy.

EUR/JPY couldn’t muster enough strength to extend gains significantly. Overall, I still think it heads higher but we’ll need to take care as we move to higher levels because a larger correction will hit before long…