Well, there is still a gap to the dollar downside but it’s so slim that I’d rule it out. We have a bearish pergence in EUR/USD, bullish pergence in USD/CHF, bullish (although slim) pergence in USD/JPY. GBP/USD is a bit different. We’ve seen a double zigzag and there’s room for a triple three – but will the market just be satisfied with a double? Let’s face it, GBP/USD has been a bit of a loner and doing its own funky stuff.
If there is any doubt that I have, then it’s USD/JPY. I suspect we’ll see some losses but we should be looking for a turn back higher. I could guess at it, but in the lower degrees it’s far more difficult to judge. However, I suspect it will turn higher over today.
The Aussie… follow the first paragraph. It has broken below the hourly Price Equilibrium Cloud and dabbling with a break of the 4-hour Cloud…
With EUR/USD looking to reverse to the downside, EUR/JPY should see a follow-through but I suspect that we’ll see a reversal back higher at some time – and driven by USD/JPY. However, it could be a rather stunted recovery.