I am neutral for now. Yesterday was a nasty day. Apart from GBP/USD and AUD/USD (and leaving out a neutral EUR/JPY), the structures in the rest of the bunch failed completely. So much so, that even the Dollar Index poked its head above 95.20…
I would like to just say, “the dollar has reversed.” I think there’s every chance of that, but there are some problems. First, I have seen a potential bullish impulsive structure in USD/JPY. I don’t think it has finished, but equally even on a new high there has to be a pullback.
As for the Europeans, well, they are a mixed bag. The dollar gained against the Continentals while GBP/USD rushed higher against the dollar. There was even a break above a wedge high in the daily USD/CHF chart… I had to scour deep to try and ratify all these conflicts but frankly, in such a limited time to make a thorough analysis, I have not really been able to make sense of the counts in any of them.
For the moment, with the dollar being supported by the 4-hour Price Equilibrium Clouds and only vague, sketchy reversal indications, the outcome appears to still be bullish - but a lot more care is now required.
I’ll also note that AUD/USD failed to break back above the 0.7366 high. I did point out the downside risk here yesterday but there is a reasonably clear limit to this. As long as it supports, there can be a reversal higher. Any break of that limit would maintain the downside – but we do have a chance of a bullish divergence.
I shall be working on the structures this afternoon and hope to find a solution. However, a dose of Pepto Bismol may be required…