The dollar market remained soft for quite some time during the day, but we should now have turned back to the upside. We have a varying range of development but are very much in the early stages of what should later be a strong move higher in the dollar. Of course, it will need swings but this month does seem to have the sense of a stronger dollar overall. What with the bitching in Parliament and the total bedlam, this looks like a 1920’s farce.
So we’re still in the lower degree development that should build up over time. However, once we have reached the higher degree development we should see a stronger structure develop. Today will be one that will see limited 5-wave moves to build the higher.
For now, we can look to the dollar upside although the start of the day – particularly in the Asian centre that tends to normally remain cautious and accepts the pullbacks. Equally, down under, the Aussie has found a high and should be heading lower.
As for the EUR/JPY cross, I was surprised by the losses – just a stronger decline in USD/JPY forging the way. To see it move more strongly lower it will need a more active EUR/USD.