False Alert

I was in too much of a rush to call for the Dollar upside to resume; it will, but not yet. It would make much better sense to take the day off and make this a 4-day weekend. So many things went awry yesterday, that it was clear that something was wrong. Indeed, the only calls I really controlled were in the U.S. indices that reached to the support levels I have outlined over the past week.

So it’s back to square one.

The Europeans and Aussie should continue make gains against the dollar. We should see a move above 1.2997 EUR/USD and below 0.9633 USD/CHF. The downside failure in the GBP/USD took awhile to resolve, until I realised that we had seen two 5-wave declines that implied the adjustment I had considered earlier in the week had to be correct. This should see a slightly deeper retracement but don’t expect too much. Just as the Europeans had stunted moves (compared to my projections) it has also adhered to my original structure. That should have a decent two-way day, but end higher.

Once these moves have completed we should find that the dollar will resume its move higher next week.

The JPY pairs: I have been wary about these chappies for a while, as not all was going to plan. I have been very wary about how the correction in USD/JPY was going to develop due to the bulk of the current wave being consumed by the massive consolidation over the past month-and-a-half. Wednesday’s high in was a valid projection, and Thursday’s collapse was more like the move I had been expecting from 103.30. I can’t say that the decline we’ve seen so far is particularly straightforward. I have my boundaries for this move, but have found the USD/JPY a bit vague. However, the EUR/JPY has much more clarity, and that is the one which points us to the downside. With the EUR/USD expected to make further (limited) gains it does imply losses for the USD/JPY.

If anything, I’d prefer to put in some orders in the Europeans and pop out for a long walk…