I can’t say that the Europeans went exactly according to plan, the final low in the GBP/USD was perfect, the EUR/USD went a bit higher than expected, and in the USD/CHD, well, I hadn’t really expected a new high. The outcome for these three is a bit mixed in terms of individual structures so there are still some hurdles to overcome at best. At worst, well, we haven’t yet had any definite confirmation of dollar losses. What’s more, it’s Friday and you have to consider the potential for the market to not push the boundaries. The worst outcome would be for a break above yesterday’s dollar highs.
Otherwise, I think we’re back on track, but it would be nice to see some confirmation. This is probably the task for today and we’ll have to watch the key levels and respective development, particularly in the USD/CHF that appears to be one step ahead of the other two. It tends to risk the possibility of some numbing consolidation at some point in the USD/CHF to allow the other two to play catch up.
The AUD/USD failed to get much lower but overall is quite within the appropriate structure. Perhaps there’s some risk of consolidation but otherwise the structure is pretty solid now.
Yesterday’s slap in the face (mine that is) was from the JPY pairs. Both broke support levels and dived lower. Now, that was not mean to happen and took some time to resolve. The USD/JPY was a little more straight-forward to figure out a likely solution but the EUR/JPY was a mess and a half. Keeping in mind my basic view, I did finally notice a structure that would explain things. It’s one of those that could just be “forcing” a structure so I remain with some misgivings. What will be required is to have a stronger confirmation of my approach. A break below yesterday’s lows in both pairs would be hard to take.
Given we’re still (potentially) only in the foundation stages of new moves I’d suggest holding back from raising position sizes until there are move confirmations.