Yesterday wasn’t an easy day, particularly in the first half, but that was always a likely outcome.
The Europeans behaved really quite well considering the early mess. USD/CHF remained below the upside resistance and EUR/USD, well it fumbled around initially – but was expected – and then pushed higher. GBP/USD completed its decline – to a deeper projection and could see a deep recovery, but this is where we may discover whether it is developing in an impulsive manner, or corrective.
Barring a larger catalyst, there’s still some buffer room for these pairs on the dollar downside and that’s something we shall need to navigate. These three amigos still seem to need a bit more time to make up their minds on the next direction. Best be aware where the break levels lie…
The Aussie picked up after a rather deep pullback. It seems that it’s taking up the opportunity to use the difficult-to-judge deep Wave b. However, these should now reduce – or only in the lower degree waves – although the general swings are still likely to continue. This still has some upside to come.
USD/JPY topped out nicely. I still have some reservations about the structure but yesterday’s moves were as I had hoped. It has, at least, kept the anticipated structure intact, but there’s more work to be done.
Clearly this will impact on EUR/JPY, which had a relatively quiet day. Indeed, it will be important to note key support and resistance in EUR/USD and USD/JPY to trigger the next directional move. There is a fine balance between the three inpidual pairs which could provide the trigger for a directional move in the Europeans.
So, it looks like a bit of a cagey start and we’ll have to handle any directional breaks if they happen…