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HARMONIC ELLIOTT WAVE

Thursday, June 11, 2009

There is some short term uncertainty but the underlying uptrend should resume today

Well, pretty much everything went according to plan yesterday. There was a wealth of profitable set ups from very close to the Dollar support levels indicated yesterday. On seeing the Dollar bounce I had thought the analysis would be straight forward today… but I have to say the whole picture was very strange… When I say that, I still mean in the very short term picture – the medium-long term into the end of next month remains the same. The Dollar has reversed its losses and should move higher overall.

Really, what I am talking about here is more whether we’ll see a sideways correction – or even a minor new corrective low before the Dollar finally rallies. One such anomaly was that EURUSD retraced 66.7% of the recovery while in USDCHF we didn’t quite make 50% while GBPUSD managed on 35%...

When talking about the EURUSD and USDCHF what we do have to keep in mind is that we are seeing (I believe) a daily triangle and these are structures that provide some rather nasty, erratic moves. Also given the time from for the moves to 1.1750-1.2850 EURUSD and 1.1650-1.1750 USDCHF there is a high probability that we shall see some rather messy consolidation from time to time. GBPUSD is somewhat different as this is not in a triangle and we are most likely correcting the rally from 1.3501.

So to try and bring this to a focus on today, I think we’re going to have to be very careful. I still can’t rule out a marginal new Dollar low in whip back lower before the uptrend resumes – especially so in GBPUSD. We must also allow for the chance that we may even see a triangle form in this correction rather than the straight correction I had been anticipating. I will try and pinpoint the right areas which would imply each scenario.

USDJPY bounced nicely from 97.10. It almost looks as if it has confirmed follow-through higher but it is wavering after reaching the 98.43 level. There is quite a bullish scenario tied up with the 97.10 area but… we really need to see price here remain above 98.00-10. if it doesn’t then again here we may just fall back into the range as has been the pattern over the past 2 weeks. Take care here as well in that case.

The JPY crosses look mixed. I still look back at the bearish Key Day Reversals, but I can’t say we’ve had any firm confirmation of losses – and indeed in GBPJPY we have seen a higher high already. Given the overall uncertain picture generated from the core currencies these crosses should be handled with kid gloves also.

Today’s analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups which saw 7 trade set ups of which 6 were profitable and the last is still in progress…

Good luck.
Ian Copsey

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