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HARMONIC ELLIOTT WAVE

Wednesday, June 17, 2009

The underlying risk remains Dollar bullish but there are signs of possible consolidation

Another good day… it’s nice to have a run of good calls but then I have to look over my shoulder as too often the wave structure begins to get more complex. Indeed, there is risk of this occurring and I somehow get the impression today may not all go my way.

First of all, the basic analysis still maintains a medium term Dollar rally through to around the end of next month. This should never be forgotten since the underlying risk is for the Dollar to make gains and when it does then the move can still be swift. In fact, there is nothing really to say that it won’t continue to rally but I feel the wave structure is beginning to look a little less direct.

I should also add that I don’t think we’ll see yesterday’s corrective lows broken but more that there is a modest risk of seeing a sideways consolidation develop. The clue will be in today’s attempt higher. If it fails above 1.3774-87 EURUSD or below 1.0924 USDCHF then this will raise the odds in favor of a quiet range trading day. Otherwise breaks of these levels would appear more likely to cause a resumption of the uptrend.

USDJPY has a modestly strong down day and held nicely at 96.00-10. However, this morning has seen it edge below 96.00 but until the 95.35-71 area breaks I feel the upside hold the key to the next move. In general I feel USDJPY will gain along with the Dollar-Europe gains but probably at a slower pace. I find I hard to get too bullish as it really doesn’t look like breaking away from the recent trading range. Overall a move to 99.64 is possible but don’t discount the chance we’ll see continued volatility.

The JPY crosses are very unclear. Today I really find the wave relationships hard to identify and I feel we need take a lot of care. The individual components of the crosses should be watched to see what will be the driving force. I do somehow feel we have probably seen the highs in the crosses and it’s more a matter of how soon the move lower can resume…

AUDUSD looks bearish and USDCAD bullish today but again I can’t see excessive moves and this is another reason behind my entire view that today could turn out to be a bit messy.

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