Wednesday, May 31, 2017

A little shake-up

Yesterday was a tale of two groups – GBPUSD & EURUSD versus USDCHF & USDJPY. I was quite aware of the balance between the two groups and was plotting a scenario that could bring the two together. USDCHF was the first to bolt out of the pen and make steady gains while USDJPY needed another new low. In GBPUSD and EURUSD things didn’t work quite as planned. The sudden rush higher saw both have the expected downside follow-through reverse higher.

It was annoying but this gambit actually brought the two sets of pairs back into directional correlation. So it appears that we can continue with the bullish structures to break free from the foundation waves. Having said that, while the Europeans do have that outlook, USDJPY still lags by one leg. It should have completed its Wave -b- yesterday but will need to provide a basis for firmer gains. The only risk is that, having seen a double zigzag, there is still potential for a triple three but which must hold above 110.23.

So, there will still be some adjustments to be made but for now, the Dollar upside should be consistent across the 4 majors – although retaining the potential for a marginal new low in USDJPY…

That leaves AUDUSD a little out of the Dollar bullish game. It has made some decent gains but still needs to see further gains.

Finally, EURJPY whipped back higher sooner than I was expecting but I suspect the general lacklustre USDJPY and more energetic EURUSD will basically see a mixed day today…

Good trading
Ian Copsey  

No comments:

Post a Comment