Well, we did see further losses in the Europeans, but hardly enough to set the market alight. In some cases the losses were retraced so we’re not that that far from yesterday’s starting levels. The good news is that the 4-hour Price Equilibrium Clouds are flattening out which provides the basis for the still (dollar) bearish daily Clouds to overwhelm. So, while I though that yesterday may have been a key day in the market it looks like the time frame has been extended through to today. However, even then the start of today still has an element of potential consolidation or deepening corrections so the consolidation does look set to continue a while longer. I suspect by the latter stages of today we should see a stronger follow-through.
The problem with all this is that the structures I see are becoming complicated with complex corrections and a good deal of noise that can (and often does) camouflage the key wave endings. Thus, there is still a strong need to approach order placement and stops in the right places and probably better to lower position sizes to allow for larger stops until the trend resumes at which point positions can be increased.
If I am to point to one potential currency pair that could provide such an issue it is the AUD/USD. It reached within 1 point of a targeted projection target but then corrected much deeper than a trending wave would allow. It just so happened that that projection level was also an expansion level. From this point onwards it has several options although once the market has resumed normal activity I still look for gains. Thus, care to be taken with this one.
The USD/JPY corrected high and into the retracement zone I highlighted, and 3 more pips, but does seem set to resume losses. However, don’t get too excited at this point as the downside limited for now and more likely we’ll see a rather broad trading range develop. In the process the EUR/JPY could well be at risk on the downside which tends to suggest that the EUR/USD may well retrace even deeper over the day before it sets off higher.
Best vehicle for a medium term trade: GBP/USD, I mentioned in the weekly video that it requires a firm rally. Look out for this one to develop.
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