AUD/USD Displaying Hourly Bearish Divergence

Price action in the Europeans developed pretty much as expected, perhaps the follow-through a little more than expected but still within boundaries, but only just. Indeed, the recycling is knocking on dollar bearish doors. The interesting, and perhaps critical, part is that even momentum is facing the same issue in terms of dollar bullish divergences but currently with momentum threatening to break those divergences. This relates specifically to the EUR/USD and USD/CHF, but not with the GBP/USD. The latter reached within 3 points of my target and is promising a bearish divergence but here we have a slightly more complicated outcome as price has not yet completed the larger rally. Thus, there is a need for the GBP/USD to act independently from the Continentals.

In the meantime, the AUD/USD made a swashbuckling rally to the upper end of my target range. It probably has another peak to come but is displaying both hourly and 4-hour bearish divergences. Thus, there could be a tight balance between bullish and bearish here also.

What has been more puzzling are the JPY pairs. It seems as if, at 140.07 it stalled 6 points above a projection level. Thus, the break above my resistance has indicated an earlier correction. This should be just about complete and suggests losses to come. Given that the USD/JPYcorrected more deeply than expected it has added a slight element of uncertainty in terms of the depth. It is in one of those positions where it could be shallow or could be deep. I suspect it could be modestly deep but this will require the EUR/USD to top out and carry the EUR/JPY lower. If both USD/JPY and EUR/USD both decline then the cross could suffer some stronger losses. However, from what I am looking at, sharp losses are not really expected.

I think the Continental Europeans are probably the best bet but just make sure of the break. Next is the Aussie for a decent move.