Just looking at the start of trading, we have very, very limited dollar downside. I have to say that we may see a dollar pullback – but limited. Frankly, I wouldn’t be surprised if the dollar just rallied from the open. This is really quite positive but how quickly we see further gains in the dollar is another matter. Let’s face it, the past several weeks – or more – have been rather slow development. How I’d like to see some stronger impulsive moves.
EUR/USD is now looking to complete the (purple) sequence to form the (cyan) Wave a/iii and Wave b/iii, to be followed by the Wave iii. Eventually, we should see the Wave -iii-, Wave -iv- and Wave -v-. How long that will take is not yet known. This is very much the same in GBP/USD. I’d like to reach down to the 1.20 area – but again, it will need quite some time.
If we’re talking about a limited pullback, then USD/JPY is the one to scorn. It is just 20 points. Again, I’d reckon we’ll see direct gains. Then comes USD/CHF. It has just 6 points…
If there was one pair that could have a deeper pullback, then it’s in AUD/USD. Even then, I reckon that we’ll just see losses.
Finally, EUR/JPY is slightly different. Friday ended the day on a low to form a Wave a. Ideally, we should see a pullback before we can extend to the downside…