Friday, August 18, 2017

Swings and roundabouts

Correlation was sparse yesterday. USDJPY swung like a pendulum although has reached the 109.40 area that could provide support but frankly, there seems to be a little more on the downside. In its own way, EURUSD did the same with some broad swings but it has kept to the plan overall while USDCHF, from my update, has been pointing lower for most of the yesterday. This one hasn’t finished its decline. GBPUSD, with its fine manners and decorum, sipped tea while watching the other pairs huffing and puffing.

Gosh, what a strange old day that was. However, all is in order and we should make further progress today. There seems to be a rough correlation in some pairs but overall we’re going to have to work with the individual pairs to find a general match for all. I fancy that by next week we should see some stronger correlation brought back…

One pair that benefitted from both EURUSD and USDJPY was the cross – EURJPY. This pair should be looking for the downside to continue but there’s not a great deal of room to work with. Once the lack of correction dissipates I suspect we’ll get a stronger reaction in the cross…

As for AUDUSD… Well, it’s more encouraging. I was looking for a 3-wave move and yesterday was the first leg. It may well develop a consolidation at some point but overall we need a move lower and a reversal higher.

The current environment is a bit challenging but by next week I feel we’ll get back on track.

Have a great weekend
Ian Copsey  

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