A bit of weirdness going on

October 31, 2018

A bit of weirdness going on

To be honest, perhaps I should clarify the headline. There are some pairs that are beginning to do strange things – in particular in AUDUSD and – to an extent in EURUSD and EURJPY is always rather trying.

Let’s start with USDJPY that completed the expanded flat – almost testing the Wave -x- high. This should now see a final zigzag lower. That’s the kinda easy one although we’ll obviously have to navigate the development. USDCHF saw a pretty firm follow-through to form the (green) Wave (a). So both of these pairs should see losses.

Then came the divorce. EURUSD dropped below 1.1335 while GBPUSD spurned the EU and rallied. Actually, this is pretty clever. The losses in EURUSD were corrective – therefore the low of an expanded flat. That will then see a 5-wave rally. At the same time, GBPUSD needs a deeper pullback to keep the balance of the ratios. Once EURUSD tops out we’ll be back on the Dollar bullish road – but clearly, this isn’t going to happen all today.

EURJPY has become dizzy, rather like a toddler trying to write. However, I suspect that it may see lower before a further pullback but this is a rather difficult development.

The drunken Aussie… it makes gains then decides it wants to dip back lower, then back up again – and down… This is very close to being a possible descending triangle but the level that needs to break is in the report. However, at this point, there still remains the potential for an expanded flat… Take care…