Following the blood bath following the FOMC I was quite amazed with the normally sluggish USD/CHF that led the way back higher to break above the 0.9595 high. Even so, with a lack of bearish divergences it will be prudent to allow a new high in EUR/USD rally once again but I sense that it actually needs some downside soon.
Certainly, GBP/USD still needs a follow-through – most likely in a 3-wave move. Once this has finalised the high we can all breathe a sigh of relief and look for the downside to take its turn.
Having said that, the Aussie has got it upside down. Price failed to reach 0.8075 and saw a deep decline. As far as I can see it will still need upside development – now above 0.8075 and more towards the higher side of the range. Even that will still need a pullback and later new high.
Another reason why I feel we have see the high in EUR/USD is the fact that EUR/JPY is beginning to drift lower and should continue to do so. I can’t see USD/JPY moving below 108.62 and therefore it will have to be EUR/USD that drives the cross lower.
For now, I feel today will be more sedate while the final stages of the complicated mess across the pairs. Take care, it could still be a bit tricky.