Yesterday was a rather mixed outlook. We did see limited Dollar losses in USD/JPY, USD/CHF and GBP/USD but the modestly deeper pullback in EUR/USD was rather a surprise. Indeed, the deeper pullback in USD/CHF was just 9 pips above the 0.9921 low. It’s even rallying as I write. Even if we had a deeper Wave (iv) – for which I allowed for – this really has very limited upside and more on the downside.
The bigger puzzle is in EUR/USD. I had to make an adjustment but I doubt we’ll see a deep pullback. It may even have topped out already. However, we should allow for a modest pullback high – even if the other pairs are really looking to the Dollar upside. USD/JPY may be a little different and may see some limited losses but overall today should continue to see the Dollar pushing higher.
When you look at the rush higher in AUD/USD there’s really very limited upside and most likely we are going to see a reversal of yesterday’s rally
Equally, there’s very little room on the upside in EUR/JPY after its deep pullback – currently a 76.4% pullback. Therefore, the odds will be most definitely on the downside…