US is trading higher for the last 24 hours after President Barack Obama nominated Janet Yellen to head the Federal Reserve. USD index is at new swing high after recent corrective retracement to 79.90. Current bullish leg is quite strong so we believe it’s a new impulse leg that should unfold in five waves. As such, we expect more upside in the next two sessions, ideally up to 80.70. Meanwhile other currencies should remain under pressure.
Below we are looking at cable, which fell nicely lower today, but intra-day structure suggests that it may be a time for a corrective bounce. Notice that we have five waves down in wave 3-cricled, so wave 4 bounce could follow soon. This wave 4 could then be an opportunity for intra-day traders to join the larger downtrend. The only question is from where wave four will occur; it may from current 1.5900 handle.
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