Last week I noted that there was a clear break at 1.1206 in the EUR/USD. After fumbling lower, it did break above. We have two alternatives: a triangle or a new high above the (purple) Wave -b-. Most likely it will see a minor follow-through before reversing. I tend to favour the triangle scenario. This could allow GBP/USD to see a second zigzag higher – or just a correction higher. Clearly, this could trigger consolidation in USD/CHF but we still need to reach some upside targets. At least, that’s the potential.
Yesterday’s drop in USD/JPY was reversed and in a 5-wave move. Therefore, we should be seeing a pullback lower which tends to correlate with EUR/USD and GBP/USD. Now if I move to the EUR/USD and USD/JPY it suggests a potential sideways move in EUR/JPY – but may just reach a little higher first.
Given the limited range day, the Aussie should see a pullback higher before later losses.