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Dealing With Extremes In The FX Market

Published 05/17/2017, 12:08 AM

These past few days have been rather a trial. However, yesterday’s sudden rush higher in EUR/USD is a pullback in a daily Wave (b) position. I could quote higher targets but there’s something bothering me since GBP/USD has already seen a sharp decline breaking below a key corrective low. This has occurred in EUR/JPY also.

As a side note, the Dollar Index - which has been bothering me in terms of whether the penultimate high was seen at 103.82 – has not yet completed a triple three.

What we do have is a higgledy piggledy development with the major pairs appearing to be conflicting. There is also a scenario in USD/CHF that could stall above certain levels – but even if they break it will still be valid due to the higher degree development. So we’re having to be pretty alert to identify which which is which…

Even EURJPY amazed… reaching 125.81 – that’s the 58.6% retracement in the daily Wave -iv-… and this suggests a reversal lower with both hourly and 4-hour bearish divergences.

As for the Aussie… well, it’s just a pain in the backside right now – and has been since a year ago. I have a feeling that we may just see it reverse back into the range otherwise I can’t see a logical structure for it. I’m not prepared to risk a bold forecast at this point until a clear break is seen – at which point I shall have to rework the entire year’s development…

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It’s a puzzling day but we should soon see a new trend develop… Follow that.

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