Interesting moves yesterday. This seems to suggest interesting moves today also. Let’s start with EURUSD. Good move and to within 4 points of the low of my targeted retracement area. Thus, the uptrend should resume… but… first the resumption has been a bit weird but secondly it doesn’t really have a fly away target and once it gets to that target we shall be due a deeper correction. With the exception of the weird start the outlook appears quite straight-forward.
So… as EURUSD began to recover GBPUSD followed suit but then ran into trouble with the carpet taken away beneath its feet and collapsed to a new low. Interesting… It’s due a modest pullback but then a new low from where another, probably deeper correction is due, but make no mistake, this pair is now pretty bearish and once EURUSD reaches its next upside target we can expect the two to return to correlation.
What about USDCHF? It looks like Swiss traders were off for the day for a ski trip. The problem I have with this dropping to new lows is that, with the current structure, it would look more like diving down a ski-jump but without much elevation at launch. At this point the downside is just too bearish to really feel it’s going to happen yet. Corrective losses? Probably… but I feel we need to move a bit higher before a break of 0.9021. It’s just the bit in-between that we need navigate first.
The Aussie? Threatens to go down. The chart is full of noise as normal and that makes it much tougher to judge and I still prefer to take a short-term view rather than long… At this point it’s best to react to breaks but I’m not convinced that it’ll be worth keeping the position.
Then USDJPY… The correction was quite deep but just held above the right area before rallying quite strongly. The problem I have is that the next target seems to be not too far above current levels and it still needs to see a correction and then follow-through. Thus, I suspect either that we shall see a deep correction before reaching target… or… I’m wrong. Thus, take this pair with care. However, the interesting point is that EURJPY appears to be in a similar position. Let’s see how well they work in tandem.