Yesterday was a tough day – too many difficult structures and some surprising outcomes. However, the good news is that EUR/USD has topped out – at last. Even the BBC reported the fact that it hit an 18-month high. When that happens it tends to reverse… USD/CHF also hit a new low – but should have been the final low. Therefore, in the larger picture, we have a long way to go on the dollar upside.
So… now should be focussing on the dollar upside. USD/JPY shot higher rather like a North Korean missile with USD/CHF also making gains but not quite so robust as USD/JPY. However, what this implies is a 5-wave rally so take care over today because we’re likely to see a reversal lower. In that pullback we shall have to observe carefully to be able to identify the Wave (b) – and who knows how deep a Wave (b) will be. So basically, we’re building up the foundation waves.
In all the furore yesterday, the jolly old pound was taking its time, taking things step by step. No doubt it will be the same on the way down. It looks like it’ll be a steady move over some time.
EUR/JPY… well, I think it has topped out but I do have some reservations. Certainly, EURUSD should correct higher fairly early on in the day – but that’s the same in USD/JPY so it looks like the cross is going to be seeing a relatively tight range.
Now that the Aussie has committed to the upside it has to continue but it looks like it’ll take some time.
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