That was not a good day. Indeed, so focussed on looking for EUR/USD and GBP/USD to extend losses and therefore US/DCHF and USD/JPY to see a correction higher, I really wasn’t prepared for the opposite to happen. I tried to work out if I had made an error in both EUR/USD and GBP/USD from their highs. I couldn’t find an alternative. GBP/USD broke above the descending channel but in terms of ratios, the bearish structure still appears to be intact. As for EUR/USD… well, it’s a tight one. There is even the potential for a minor new high above 1.1832 in an unusual 41.4% expanded flat.
That both USD/JPY and USD/CHF saw losses in 5-waves basically implies a pullback higher and that tends to corroborate the potential for EUR/USD and GBP/USD to extend losses.
So that’s the basic outlook for the 4-majors but even the Aussie decided to forget the downside and broke above key levels. It, too, needs a correction lower.
As for EUR/JPY… oh my goodness, what a mess. It’s almost like a baby having thrown its food on the floor, wiping sticky parts all around his tray and filling his nappy at the same time. Stay away for a while until there begins to be a more stable development.
So while yesterday’s Dollar bullish outlook was a complete wipe-out, it should happen today.