Every now and then, particularly following some pretty decent outlooks that held together so well, suddenly a bolt come from the blue. Yesterday it seemed to be blue, yellow, green – although made me feel black. In this particular event the problem I see is that some pairs appear to have completed a move while other seem the reverse. Having said that, the majority of pairs do seem to suggest further dollar weakness – although that will create further havoc in the structures.
For example, the decline in EUR/USD was pretty darn perfect but the depth of the pullback from 1.0493 is in danger of breaking the impulsive structure. This is also valid in USD/CHF. Then, on the other hand, GBP/USD seems to need to push higher – just as USD/JPY needs to move lower.
This is putting a strain on the entire balance of the market. Even AUD/USD, that looked to be set on a downward path, suddenly upped sticks and moved to new highs. However, that may well solve an issue but the structure is shot to hell.
The only pair that really made any sense was EUR/JPY – but then the balance between EUR/USD and USD/JPY will trigger further weirdness.
Today appears to be a day to observe and wait for the market to calm…