I had some doubts yesterday, even allowed for some dollar weakness but felt that the dollar bullish outlook appeared the better option overall. In EUR/USD I quoted the line between the two possibilities at 1.0573. So when it capped at 1.0574 I was feeling quite happy. Then I crept into my bed…
Fast forward to my habitual 3am rising from my slumber and I gaped at the additional dollar losses… There was always the risk, of course, because USD/CHF had room on the downside. So, as annoying as this has been, it does now provide a very clear outlook and targets. It may complete today but there’s a chance that it could occur on Monday.
So let’s see how today develops. As far as I can see we need a correction first. There are six types of corrective structures and that’s what we’ll have to identify. It could be brief or it could be long if one of the three complex corrections develop. However, perhaps the main catalyst can come from the first Non Farm Payroll of the year… Who knows what that will trigger… but I think I know…
Having said that, from my expectations in EUR/USD, I still can’t help feeling that we’ll still see some strong swings over this month. This seems to be a persistent issue across most of the currency pairs although they are in their own different structures that could generate some decent moves but perhaps with some variance in velocity…
So, as normal on the first Friday of the month, we’re likely to see a generally quiet day until the Fed’s announcement…