Nah… just fantasizing… Probably more like venting frustration than anything else. Having said that, it does look like we’ll see a decent move today – most likely not too excessive - but a reversal of the gains we saw yesterday. This should apply to USD/JPY, EUR/USD and USD/CHF at least. I have some reservations in GBP/USD but let’s just say it’s not impossible but would tend to risk stretching the limits I have been looking for. Actually, I’d much prefer to see GBP/USD make losses to be honest, but it would likely require a break of correlation with the three pairs named above.
However, I do have doubts that we’d break the recent dollar lows – or only marginally – but we’ll have to make that judgement when the time comes and based on the structure. The point here is that it’s going to require laying the foundation waves and that tends to suggest more limited progress.
The Aussie is somewhat in the same boat following its stronger follow-through yesterday. What this has left us is yet another flip of the coin. Will it continue to extend gains or will we get a deeper correction? It’s just in one of those sections of the structure where it has valid options on both sides of the market and this is going to require some savvy to work out which will develop by the structure.
The biggest surprise yesterday was in USD/JPY with its deeper correction. It’s quite an interesting development because it has potential for a stronger move. That said, there are options and this will need some understanding of implications. We still have EUR/JPY almost in rigor mortis, but with space on the upside and also on the downside. It could be USD/JPY that sets it on its way but we still need to know the limits on either side of current price that will trigger the next move. Which moves first – EUR/USD or USD/JPY?
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