No great surprises yesterday. The market is only just beginning to calm its frayed nerves following the ECB announcement, and this will probably still need another day or so for a more definitive outcome to develop. From my perspective it’s all a matter of making sure of the structures and how they integrate through the lower and higher wave degrees. It was particularly noticeable yesterday that the dollar made more gains against the euro compared with USD/CHF and GBP/USD. Perhaps that’s not particularly significant, but considering these moves will be amplified through the projection ratios it points to a much weaker EUR/USD overall.
Having said that, I’m not really expecting any real acceleration today but more likely a similar day to yesterday. However, we shall have to watch out for a pullback following today’s (expected) follow-through. There is even a risk of GBP/USD baulking the trend – although there’s not any room before it is at risk of breaking down. Such is the rather unusual relationship between some of these pairs that even AUD/USD does not yet look ready to see further losses at this time. Thus, it would not surprise me to see AUD/USD making gains today.
The JPY pairs managed to see losses as I had expected. There was nothing outstanding about the decline, but it has actually provided a base to build on. I suspect both of these pairs will be looking to the downside now, but we’ll have to wait and see how robust and constructive this turns out to be. EUR/JPY managed to extend losses, and while a correction is required, I can’t see it being too deep.
It should be a steady day today…