The follow-through … didn’t. Basically, this implies that the structure is being elongated within a lower degree development that causes deeper pullbacks before follow-through can develop. In effect, it’s a deep Wave b/iii outlook but in this case, I suspect we shall see a pullback and a second rally to form the Wave b/iii in EUR/USD and GBP/USD.
Equally, there may be the potential for a similar situation in USD/CHF and USD/JPY but in a slightly different way – that there is a risk of an expanded flat in USD/CHF while USD/JPY could complete a Wave c/I for a pullback. This tends to suggest a rather slow start to the week.
Additionally, Friday’s deep wave b/v outlook should now allow the Aussie to complete a triple three.
As for the cross, EUR/JPY seems to suggest a pullback and later follow-through.
Of course, note the dollar high extremes that would break the outlook suggested above.
By Ian Copsey
Oct 22, 2018 03:19AM ET