Yesterday’s development was basically as expected. I hadn’t been looking for a stronger follow-through on the upside but looking to see some endpoints. Towards the end of the day, that’s exactly what we got. However, I have some conflicts in the pairs in terms of the balance between them that tend to have endpoints that do not seem appropriate. In particular, GBP/USD appears to have formed a low but the pullback is currently extremely shallow – but at the same time EUR/USD and USD/CHF appear to have limited room for the dollar downside. Certainly, I feel the Wave [i] and Wave [ii] appear really shallow.
I note that USD/CHF is above its rising 4-hour Price Equilibrium Cloud while USD/JPY is dangling just below its 4-hour Cloud. Meanwhile, EUR/USD has popped its head above the 4-hour Cloud while GBP/USD remains below a rather sharply declining 4-hour Cloud. This doesn’t seem to suggest much correlation.
Therefore, I’d like to take a cautious approach today to try and resolve the conflicts through the pairs. Some additional development may well provide us with a stronger way through. Preferably, I’d like this to be dollar bullish – but I’d like to see confirmed breaks.