USD: Close To A Reversal

Ouch … The correction I expected was nothing like the pullback I had envisaged. Instead, in EUR/USD and GBP/USD the dollar plowed higher and basically almost completed the entire move rally. This tends to suggest limited gains from here on. Most likely we should see a pullback lower in the dollar and later new high over – maybe today – or into tomorrow depending on how the market decides to react.

While all the rush and fever in EUR/USD and GBP/USD, the other two majors quietly looked upon their brethren and forgot to react. USD/JPY should see a minor follow-through and later a recovery. Equally, USD/CHF should rather remain in a sideways move. The reasoning comes from the fact that EUR/USD and GBP/USD appears to have limited dollar upside and over the week a firmer correction. GBP/USD may well have completed its decline.

We may have seen the Aussie complete its Wave v but take care. Either we’ve seen the low – or will see limited follow through before the reversal higher. I also suspect that EUR/JPY has found a low for now and may well begin to see a ragged pullback higher…

Take care over these limited dollar gains.

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