Wednesday, June 14, 2017

Third time lucky?

The first two days of the week defied my Dollar outlook. Clearly, I’m a bit frustrated with the lack of follow-through but remain with same view – though perhaps a little more cautious. I was surprised with the deeper pullback in EURUSD – and could envisage a difficult day for this pair. However, when I look at USDJPY, USDCHF and GBPUSD there doesn’t seem to be much room for Dollar losses… Well, maybe it will be the same for EURUSD but in this situation I can envisage potential for minor follow-through on both the upside and downside. Any break lower would confirm the Dollar upside along with the other three majors. Thus, we need observe the other three majors to confirm some sort of correlation.

The Aussie… went walkabout (and looked like it imbibed plenty of the amber nectar.) At first it looked as if it was going to poke its head above 0.7554 to reach 0.7564 and then promptly crashed. So it looks like we’re going back to the 0.7485-95 area for the final rally…

EURJPY kinda worked well but was much stronger than I had expected to complete the triangle and should now begin to see losses but will also require a pullback higher. We have seen an initial 5-wave decline and is now looking for a pullback. How this will fit in with the balance between EURUSD and USDJPY is something to observe… It looks like a mainly USDJPY bullish day but will need a pullback also – so could be modestly deep.

Good trading
Ian Copsey  

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