The past week was rather rough, mostly in EUR/USD and GBP/USD and should now be looking towards the Dollar upside. However, the entire range of pairs are still rather haphazard. Both USD/JPY and EUR/USD topped out within an hour of each other – and that should see EUR/JPY see some decent losses. It won’t last for a long because USD/JPY is just seeing a pullback lower while EUR/USD should continue losses for a follow-through lower.
For today, Cable still has losses to go – but not as deeply in EUR/USD. At the same time, USD/CHF appears to need a new low before it can finally begin to see a more bullish outlook. This does really provide a correlated market at this point. From that point of view, it tends to suggest a rather staccato range of development through the pairs. At some point, it will begin to generate a more concerted bullish move but we’re going to need to follow the individual pairs before they later converge into a correlated Dollar bullish move.
Certainly, AUD/USD has topped out and therefore we should see losses. Of course, at this stage, we will be looking at the initial foundation waves and therefore maintain a general, correlated Dollar bearish move throughout the pairs…