The start of the week was a rather complicated one. I knew we needed initial losses – in USD/JPY we saw a miraculous expanded flat in the Wave ii that had only a 3-pip range to target. The other development was the potential for swings in EUR/USD and GBP/USD. The latter could have seen a deeper follow-through higher but once EUR/USD reached a pretty deep pullback, both pairs just decided to revert to the downside.
So, while there is risk of a limited pullback – Asia will likely see a rather shallow range – overall this should see the dollar following through on the upside. Both USD/JPY and USD/CHF should see gains.
While AUD/USD can be rather independent, we have seen a bullish double zigzag but the Wave -x- is still some way lower. Until that Wave -x- breaks lower we have to still be aware of the risk of a triple three. Therefore, take care.
EUR/JPY had a bullish day, courtesy of both EUR/USD (initially) and USD/JPY providing a swing lower and later higher. While EUR/USD could see a minor pullback for losses to resume, while USD/JPY should likely see gains. The risk could be a consolidation…