Goodness gracious… That was a mixed up reaction across the board. EURUSD made some modest gains, USDCHF couldn’t be bothered and GBPUSD failed to recycle and slumped lower. AUSDUSD attempted to resume the downside but kept getting prodded higher. EURJPY seemed to love lounging around the area of Monday’s gap lower and USDJPY seems to have altitude sickness at these dizzy heights.
Obviously I look for structure and for appropriate ratios to be present for each segment of development. Even that was pretty tough in much of yesterday’s moves that looked more like someone cleaning the PC monitor and accidently rearranging the bars.
So we’re left with some rather vague structures that seem more corrective in nature but with the added challenge of slotting these into the larger fractals. I do still feel that the Dollar bearish correction is not yet complete. This seems to be strongly implied in EURUSD. I can probably add GBPUSD to that following a slight adjustment in perception yesterday following the upside failure. Even then it’s not a structure that has great clarity but seems to fit in better with the larger fractal targets. That just leaves USDCHF doing its own thing and needs to develop some clarity in its next move and to fall in line with the other two Europeans.
The Aussie corrected higher more deeply than expected. I can still absorb the deeper pullback although it’s approaching its limits. Ideally this should soon extend losses.
As for the JPY pairs… whew… they’re quite a mess in the short term development. In particular EURJPY was stronger than expected, not excessively, but for its position does raise some questions over whether it’ll resume losses or actually make a new high. I’ll not rule it out but it’s not one I’d like to touch at this point. This pair, when it gets complex, is a bit like a long piece of string that has dropped and become entangled. I’d suggest waiting for more clarity.
USDJPY failed on the downside and recovered but not enough to break above Monday’s corrective high at 102.91. This one should also be approached with care as this sideways consolidation seems to suggest a sharp break and obviously that could be in either direction. My preference remains lower but the large consolidation over the past month does have potential to skew the ratios in the terminal stages of this rally. Thus, best be sure of the move before raising risk…