Thursday, August 10, 2017

Now for the difficult bit…

Not too many surprises yesterday and, for the most part, we’re moving into corrective sequences. The basic direction should now be Dollar bearish but we shall, therefore, have to be wary of those miserable, erratic corrective structures. However, there is one pair that needs to complete its final rally – and that’s AUDUSD – that had been waiting in the wings waiting for the general Dollar bearishness to help it on the way up. This is going to require a 3-wave rally to find a new high … 

Overall, I’m expecting to see this pullback lower in the Dollar extending into the first half of next week.

So, as today begins, everything is looking a bit dodgy – but this suits the Asian session. Therefore, take a bit of time off and allow the Europeans to take on the job of finding the route for (Dollar) the downside. One clue in this move will come from USDJPY. I had been championing a bullish Dollar but there are two options - and that's a tough choice to decide... Ideally, if this correlates with the other majors we could find our reversal point – but as I mentioned, I suspect this will occur next week.

Yesterday saw the low in EURJPY and, like the general theme, we have to go through a correction higher. This should, therefore, imply that USDJPY will likely see a complicated 5-wave decline so that the cross can extend higher. I have no target but hopefully, as the correction higher develops, we begin to make stronger judgements.

Good trading
Ian Copsey  

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