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HARMONIC ELLIOTT WAVE

Thursday, June 18, 2009

Range trading likely again today

Well, I looked over my shoulder at the right time. The solid bullish wave structure diffused yesterday and while I still retain that medium term bullish expectation the way things went yesterday open up several different possibilities in terms of a corrective pattern before the uptrend can resume. It would be right to ask whether this can resume directly and of course the answer is that it is one of the possible permutations at this time – but it’s not one I favor right now.

In many ways I am very comfortable with the development due to the time issue. I don’t expect a Dollar high until towards the end of next month and a direct rally from here would have implied a really complex correction over the next 2-3 weeks – which is possible but highly unlikely.

So we have a correction now and it may well take a day or two to play through and certainly through to the weekend. The next problem is choosing from the several possibilities facing us. I’ll approach this problem first from the JPY crosses. These have become very messy but we should be used to that. The biggest signal yesterday was in AUDJPY which bounced just about perfectly (bar one pip) from a support level that indicated a complex correction is developing there. Similar structures were evident in the other two also. I therefore look for this group to see gains today.

Next… will it be USDJPY that drives it up, or weakness in Dollar-Europe? Actually, there could be a combination of the two here if I’m to be honest. I can actually see EURUSD scrambling a little higher, USDCHF a little lower before coming back into range. USDJPY does show tentative signs of being bullish today also but quite how far is a little uncertain.

Needless to say, from this description it is going to be a day where we should either just avoid trading until the patterns clear up or if we really want to dabble, then be very careful. Take profits when seen for if this is a complicated correction as I suspect the wave structure could be very choppy & erratic. If anything, favor the JPY crosses on the upside and let the others sort themselves out.

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups.

I shall be presenting a seminar in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see
http://www.earlthorn.com/ for details.

Good luck.
Ian Copsey

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