I had expectations for a stronger directional move to develop on Friday, but clearly that did not come to pass. Indeed, the move higher in EUR/USD to 1.0627 was exactly the same type of move that we saw in the Trump Spike, which saw price move to 1.1299. Neither of these two instances really required such a deep pullback. However, what it implies is a stronger trend in the Wave (c). Annoying - but frankly no harm has been done to the structure.
So the longer-term outlook I have been following is still in place and – should this continue – we’re still pointing to the range of targets over several wave degrees. While it’s a bit early in the week to mention, Friday’s Non Farm Payrolls will likely provide a catalyst. I mention this in order to enable some clarity as we approach that release – what degree of noise will it make and how will it fit into the larger structure. These will be factors that can be mulled over during the next few days in the hope of being able to take advantage.
I still have some mixed feelings over USD/JPY and tend to feel that we are in a terminal process in the current wave degree. I don’t think that it will impact that much on EUR/JPY. Instead it’s more likely going to be driven by EUR/USD. So there is some balance between the three pairs.
The Aussie has been making gains, a little messy but steady. It is currently in a position where it can correct see some losses – or even make some gains. This provides a rather difficult outlook for now and it’ll be better to wait for breaks that will confirm one of two outcomes with the bullish side being the easier to identify the next wave. The only trouble is that it could still dip first. Thus, with an unstable structure I’d suggest leaving well alone until one outcome or the other is fulfilled…