A Wave (ii) correction of 22% rarely occurs. The outcome to this event is a surprisingly direct follow-through. These events are painful because it’s difficult to be prepared for a rare event… That scuppered my conservative outlook but does provide a general outlook for the Europeans. In some ways, it’s still early days. I can generate potential projection targets but at this point the range of applicable ratios are too many to be certain. This has the bump on effect of estimating where the intermediate lower degree waves may stall.
Nevertheless, the burst higher in the dollar has seen it break above both the 4-hour and hourly Price Equilibrium Clouds – so a positive outcome – but while EUR/USD has broken below its daily Price Equilibrium Cloud, it has not been replicated in USD/CHF. GBP/USD is in a different position but still pointing lower.
Quite how AUD/USD managed to break above 0.7242 had me speechless. I can’t imagine it’s going to soar away higher but there does appear to be risk of further gains. There are probably two high risk outcomes with the difference being how deep it can continue higher. It has forced me to scramble to work this out but I’ve not quite sussed it out yet… Best leave alone for now and observe the next move…
USD/JPY… failed to extend losses and actually pushed higher. It was the eventual outcome anyway but I would have preferred to have caught the low. The target remains the same. However, as much as USD/JPY made gains, it was not enough to stop EUR/JPY extending losses. I suspect that general outcome will continue – as – most likely – EUR/GBP should also drift lower. In terms of USD/JPY and EUR/JPY it’ll be best to hold off due to the risk of some erratic lower degree development at times. Best wait for that USD/JPY target…