Having seen the high in the Dollar, the losses have been limited to un-extraordinary – but that’s not an issue. We shall still see losses over time but this current development appears ultra-slow. Indeed, as the week begins we should see a new Dollar low but then a pullback. I can only hope that once the pullback has been seen, perhaps the Dollar can concede losses a little more robustly. Just looking back on the past few days when EUR/USD and GBP/USD provided a low, GBP/USD has seen a modestly firm recovery while GBP/USD appears rather slothful – and we still have quite a way to go.
Within the two pairs of Majors (EUR/USD & GBP/USD versus USD/JPY & USD/CHF) we’re pretty much half way through the Dollar (bearish) pullback. I remain looking for USD/JPY and USD/CHF to provide the limit of the Dollar pullback. Indeed, I’m expecting USD/JPY to see a new low for a pullback although USD/CHF has rather a more complicated potential – but as far as I can see the Dollar upside is limited.
EUR/JPY has remained lethargic since EUR/USD and GBP/USD found their lows and with the general correlation between the pairs I’m still considering the possibility of a triangle – or complex correction.
And finally, AUD/USD broke the upside limit that implies that the 0.7202 was the (brown) Wave -a-/-iii-. This should see some initial swings – overall higher – before we’ll see a reversal.