Potential For Dollar Losses
That was not an easy day to forecast although there were some decent calls at least. I still have some reservations over a few of the structures but there does appear to be a general consensus on direction. Still, this needs to be confirmed but the targets I have been suggesting appear to be somewhat closer to being seen.
Both the Continental Europeans have an odds-on chance of seeing dollar losses. Quite how the market will carry that along is always the more difficult part but there will be some deep-ish corrections down the line so take note of the approximate target areas in both that need to correlate. These two have completely different structures at this point but do have developments that will need that deep-ish pullback later down the line.
It seems the structure I had in GBP/USD was not quite right but this does bring it back into broad correlation with the Continentals. It’s not an easy outlook in the lower degrees but the larger degree is pretty much set – very much like their erstwhile European partners.
Equally, AUD/USD – apart from seeing a deeper decline than I had expected – failed to breach the 0.7490 low. Therefore it will likely follow the Europeans but within this move we’ll need to observe for signs of any potential impulsive development – or of course, any break from the weak dollar scenario.
I was surprised by the depth of losses in USD/JPY. This raises some questions over the structure although it hasn’t broken any key levels that would force a reversal. For now I’m going to retain the structure I have been suggesting but we may need to adjust this. It’s difficult to judge how this will fit in with what appears to be a potential triangle in the cross and consequently may subdue USD/JPY. However, I’d be a bit concerned if USD/JPY dropped below 101.40…
Best follow the Europeans today…