After a break over the Christmas period, the market settled and we should see gains in the dollar.
I looked into the curious case of the EUR/USD highs. We have three options: the 1.1586 high, the 1.1496 high and 1.1479. The 1.1586 high was on January 1st, but I am discounting that as an aberration due to the extreme lack of liquidity. I have 1.1496 from FXPro on January 2nd and finally the Reuters high at 1.1479. I have decided to use the Reuters price – but allow for 1.1496. I shall follow both the FXPro and Reuters to try and validate the correct structure.
Friday’s much deeper pullback in GBP/USD came as a surprise. There is still a risk of a minor new high along with EUR/USD, USD/CHF and USD/JPY, but I suspect we should see the dollar reverse back to the upside pretty quickly – perhaps it could even see direct dollar gains. Either way, it should see the dollar pushing higher over the day.
EUR/JPY is rather difficult. We have a rising wedge although I feel it needs to move higher. That will need a stronger push higher in USD/JPY and maybe a break above the (brown) Wave -b- in EUR/USD. Therefore, take care once we have seen some more constructive development after the open.
As for AUD/USD, I can’t say we have any bearish reversal indications but we have already seen a very deep Wave [b]/[iii] so there really isn’t much room on the upside. Therefore, still focus on the dollar upside.